Copper hit a two-week low on Friday, slipping further after a first-quarter 2.4-percent loss as a lull in Chinese demand worried investors and dollar strength eclipsed optimism from US jobs data. Three-month copper on the London Metal Exchange was untraded at the close and last bid at $9,359 a tonne after a session low of $9,263.25.
It closed at $9,430 on Thursday, sealing its first quarterly loss since June. Base metals have fallen on softness in Chinese demand, as well as on turmoil in the Middle East and North Africa, which has boosted oil prices and stoked inflation concerns. "People are still nervous," said Charles Kernot, an analyst at Evolution Securities. "It's still a very fragile market." US employment recorded a second month of solid gains in March and the jobless rate fell to a two-year low of 8.8 percent, marking a decisive shift in the labour market that supported sentiment towards the economy and metals demand.
"The survey today should help things," Kernot added. Though upbeat for sentiment, the data also propelled the dollar higher versus a basket of major currencies, removing some support from metals by making them costlier for non US investors. Other data was less positive, showing the US manufacturing sector grew at a marginally slower pace in March, while US construction spending fell more than expected in February to its lowest level since October 1999.
Japan's nuclear and humanitarian crisis is in its third week, with radiation still leaking from a crippled nuclear power plant and thousands of people still homeless. Hefty copper stockpiles in China have slowed demand from the world's top metals consumer, compounding concerns about weak physical demand and keeping prices in a tight range. Imports of refined copper fell 36 percent to a 27-month low in February, recent data showed.
Latest data shows LME stocks of copper fell 1,000 tonnes to total 438,850 tonnes, but have been steadily climbing since December. Longer term analysts are still positive about the outlook for copper, especially as there is a deficit. "In the short-term, supply is going to be fairly tight," said Peter Archbold, European head of basic materials at Fitch Ratings. "I'm very positive about copper this year. It could get closer to $11,000 a tonne due a deficit in supply."
Aluminium closed at $2,631 a tonne, from $2,645 at the close on Thursday. Zinc closed at $2,390 a tonne from $2,362 at the close on Thursday and battery material lead ended at $2,698 a tonne from a close of $2,695. Tin, untraded at the close, but last bid at $31,500 from $31,800 a tonne. Nickel was at $25,600 at the close from $26,095 a tonne.