Copper moves up

Copper rose on Friday, due to a retreating dollar and firm US economic data, but gains look vulnerable going into next week with Europe's debt crisis and its impact on metals demand still causing concern. Industrial metals have fallen this year as Europe's problems stunt economic growth, sap banks' lending for commodity trading and threaten to dampen demand for goods exported by emerging nations.
"Prices have been under pressure this week because of, more than anything, renewed concerns about the euro problem," said analyst Stephen Briggs of BNP Paribas. "After a big fall like that, you tend to square positions. Obviously turnover will rapidly decline through next week in all financial markets which in itself leaves the market open to volatility, especially if there are any developments."
A steadier tone in wider markets, and a halt in the slide of the euro against the dollar was lending metals some support on Friday. A softer dollar makes commodities less expensive for holders of other currencies. Also, government data showed US inflation pressure waning, fanning expectations the Federal Reserve could do more to boost economic growth. The latest consumer price report followed data on Thursday suggesting a possible pick-up in job growth, which has been meagre during the current recovery.
Three-month copper on the London Metal Exchange, closed at $7,345, from $7,211 on Thursday's close. The metal is down around 6 percent for the week, on track for its biggest weekly loss since the end of September and the first annual decline since 2008, when the global credit crunch was at its worst "In the current environment we would argue that it is still too early to buy industrial metals," Credit Suisse said in a note. "However, yesterday's economic data already gave a hint that fortunes could turn more positive for industrial metals in 2012."
Price gains may be capped as production at mines resumes following labour disputes. Freeport McMoRan Copper & Gold Inc expects full operations at its Indonesia mine to start by early 2012 after reaching a pay deal on Wednesday to end a three-month strike that paralysed output at the world's second-biggest copper deposit. But warehouse inventories of copper are rising.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 9.4 percent from a week earlier, while stocks in warehouses monitored by the LME fell 825 tonnes to 381,250 tonnes, representing around a week's worth of global consumption. "This is the second week which copper inventory in Shanghai moved higher. For the second week running cash copper is trading at a discount to the SFE January contract which is resulting in metal flowing into Shanghai warehouse," said Standard Bank in a research note.
Three-month tin was $18,800, from $18,600 at the close on Thursday. Indonesia, a major global producer of raw materials, plans to impose export taxes on a range of commodities, including metals and rubber, as part of a raft of new fiscal policies for next year, the industry minister said on Friday. Aluminium finished at $2,005, from $1,975. Zinc ended at $1,8 68 from $1,844.5, lead was $1,960 from $1,875, and nickel $18,5 50 from $17,895.