NEW YORK/LONDON: Copper fell on Friday on a dollar rally, as the industrial metal notched a fourth consecutive week of losses on global demand fears amid a deepening euro zone sovereign debt crisis.
Highlighting global recession worries caused by the European debt contagion, Italy paid a record 6.5 percent to borrow money over six months, sparking a sell off in global markets. The S&P 500 index posted its worst weekly performance in two months.
"European demand for copper is falling off the face of the earth right now. There are also concerns over China's slowdown. All of those factors are contributing to the ugly bear channels on copper charts, with the metal trading below key moving averages," said Frank McGhee, head precious metals trader of Integrated Brokerage Services LLC.
Three-month copper on the London Metal Exchange ended at $7,230 a tonne, down from a last bid of $7,265 a tonne on Thursday. LME copper lost around 4 percent this week and touched a one-month low of $7,100.25 on Thursday.
US copper futures for December delivery settled down 90 cents at $3.27 a lb. Volume was 25 percent above its 30-day norm despite an early US market close in observance of the Thanksgiving Day holiday.
Four consecutive weeks of falls in copper have wiped close to 9 percent off the price of copper in the month to date. It is trading around 24 percent lower on the year.
Investor anxiety remained high in Europe even though France and Germany agreed on Thursday to stop arguing over whether the European Central Bank should do more to rescue markets in the 17-nation currency bloc.
Three-month aluminium ended at $1,993 a tonne from a last bid of $2,018.15. The price has been hovering close to its lowest since July last year of $1,982.25.
"Aluminium is demonstrating the worst fundamentals at the minute," said Natixis analyst Nic Brown. "In the here and now with what's going on in the financing side, aluminium is more vulnerable than other metals."
Traders have said more than 1 million tonnes of global aluminium stocks are expected to be released from financing deals as credit tightens.
Reflecting tight credit conditions, an executive at British-based trading house Stemcor told Reuters metals trading companies face increasing funding costs and counterparty risk as the banks' funding crisis threatens to spread to the industrial sector.
In other metals, tin closed at $20,700 from $20,350 and battery material lead ended at $2,004 from $1,992.
Zinc closed at $1,910 from $1,888. Nickel did not trade at the close, but bid at $16,950, down from a close of $17,075 on Thursday.
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