LONDON, Nov 14 (Reuters) - Copper rose more then 6 percent on Friday, as a rebound in global equity markets helped support industrial metals and offset a firmer dollar.
Copper MCU3 for three-months delivery on the London Metal Exchange closed at $3,820 per tonne, after rising as high as $3,868 per tonne, compared to its close of $3,630 a tonne on Thursday.
"The rise is due to stronger equity markets," analyst Stephen Brigss said. "We've had this extraordinary turnaround in Wall Street last night, I think that's what's benefited copper."
But metals trimmed some of their gains after U.S. retail sales data for October showed a record decline, pushing Wall Street down sharply. European shares, which rallied more than 2 percent earlier have also slashed some gains. [EU]
Strong equity markets helped offset the negative impact from a strong U.S. dollar, which rose against the euro. A strong dollar makes industrial metals more expensive for local currency holders.
"The whole world seems to be trading as a derivative of the S&P at the moment," said John Reade, a commodity strategist at UBS. "The surprising late (overnight) rally in the S&P future has suddenly injected a little bit of positivity into asset markets and played a role in lifting commodity markets too."
But the economic gloom and bleak demand outlook for metals persisted. Prices of the metal, used in power and construction, have fallen more than 55 percent since a record high of $8,940 in July.
As economic worries lingered, LME stocks jumped 1,475 tonnes to 274,100 tonnes -- a reminder of the metal's weakened state of demand.
Analysts' doubts that the rise in base metals will be temporary was reinforced by gross domestic product data for the euro zone showed that the region plunged into recession in the third quarter. [ID:nLE565143]
CUTBACKS
Aluminium climbed as much as 2 percent to $1,967, and closed at $1,925 a tonne, from $1,928. The metal, used in transport and packaging, has come under pressure in recent weeks on news from auto makers of deteriorating car sales.
Highlighting poor car sales, European new car registrations suffered their second biggest fall of the year in October, down 14.5 percent, as the credit crunch and worsening economy discouraged people from making such a big household purchase. [ID:nLE674859]
Aluminium LME stocks rose 1,075 tonnes to about 1.6 million tonnes.
"News of further production cutbacks is also supporting prices," Commzerbank said in a research note. On Thursday, Xstrata Plc (XTA.L: Quote, Profile, Research, Stock Buzz) announced plans to cease operations at the Craig and Thayer-Lindsley nickel mines ahead of schedule. Nickel MNI3 ended at $11,000 from $11,450 at the close on Thursday, lead MPB3 at $1,350, from $1,338, and zinc MZN3 at $1,200, from $1,210. Tin MSN3 rose 3.3 percent to $14,150 from $13,700 but closed at $13,900.
The big macroeconomic news of the day is the meeting of the Group of 20 world leaders in Washington.
Leaders of the world's 20 richest nations are not expected to make any breakthroughs at the meeting, given the absence of U.S. President-elect Barack Obama, whose involvement will be key to any global initiatives. [ID:nN13377562]
"Words not deeds I suspect will be the main thing to come out," said UBS' Reade. "Ultimately base metals are trading lower because global growth is slowing and I don't see how that is going to change as a result of the G20 meeting."
Metal Prices at 1711 GMT Metal Last Change Pct Move End 2007 Ytd Pct
move LME Cu 3800.00 170.00 +4.68 6670.00 -43.03 SHFE Cu* 30000.00 950.00 +3.27 56880.00 -47.26 LME Alum 1920.00 -8.00 -0.41 2403.00 -20.10 SHFE Alu* 13700.00 70.00 +0.51 18180.00 -24.64 COMEX Cu** 170.00 8.50 +5.26 303.05 -43.90 LME Zinc 1185.00 -25.00 -2.07 2370.00 -50.00 SHFE Zinc* 9710.00 145.00 +1.52 18950.00 -48.76 LME Nick 11050.00 -400.00 -3.49 26350.00 -58.06 LME Lead 1335.00 35.00 +2.69 2550.00 -47.65 LME Tin 13675.00 -25.00 -0.18 16400.00 -16.62 ** 1st contract month for COMEX copper * 3rd contact month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Additional reporting by Humeyra Pamuk; editing by Karen Foster)
