Base metals came under modest profit-taking pressure on the London Metals Exchange Thursday ahead of the Easter break, but brokers said renewed fund interest with the start of the second quarter was likely to extend strength into next week.
"The rally was a little overdone and due for a pullback," said Man Financial analyst Edward Mier.
Speculative interest in the afternoon session ahead of the Easter holiday weekend lifted LME copper prices 3% through $7,500/ton, a broker said.
Fresh allocations for the quarter and squaring of short positions booked earlier this year were behind the gains, he added, with a more bullish tone dominating trade.
Cautious profit-taking ahead of the weekend then pressured the metal down to $7,370 a metric ton, noted BaseMetals analyst Will Adams, down 0.7% from Wednesday but still a gain of 8% since the start of the week.
Meanwhile, the three-month zinc contract gave back 2% of its roughly 10% rise this week.
Commodity trade advisory buying interest continued into Thursday, one analyst noted.
The CTA has been offloading some of its short positions on signs of increased demand, he said.
Canceled warrants, or stock about to be shifted from warehouses to producers, a leading indicator of increased demand, saw a 15,950 ton increase on the day, LME data showed, almost triple levels seen in early February.
However, the market still remains heavily short, a broker said.
Nickel gave back the session's gains, to finish flat on the day. Early in the session LME nickel touched a fresh record high of $50,000/ton. Brokers said speculative fund inflow and technical buys are likely to extend gains next week.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Wednesday PM kerb
Copper 7330.0-7340.0 Dn 85
Lead 1990.0-2000.0 Dn 15
Zinc 3430.0-3435.0 Dn 65
Aluminium 2840.0-2841.0 Dn 30
Nickel 49400.0-49500.0 Up 5
Tin 13950.0-14000.0 Dn 325
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