Copper dipped on Friday to a three-week low, weighed down by a firmer U.S. dollar and concerns about falling demand and rising inventories.
Aluminum fell to its lowest price since October 2002 as stocks in London Metal Exchange warehouses rose to a record.
Demand worries continued with buying from China, the world's biggest consumer of copper, expected to be subdued ahead of the start of the Chinese Lunar New Year next week.
“There is downside risk,” said Marc Elliot, an analyst at Fairfax investment bank.
He said the market will be looking to see whether industrial demand picks up after the Chinese New Year.
Funds buying back short positions – bets on lower prices – and some arbitrage buying as traders took advantage of the gap between Chinese domestic prices and those on the LME helped support the market.
Three-month copper on the LME fell as much as 1.1 per cent to $3,055 (U.S.) a tonne, the lowest price since Jan. 2. At 1046 GMT it was trading at $3,071.50 from $3,090 at the close on Thursday.
The stronger dollar, which makes metals more expensive for holders of other currencies, and rising inventories weighed on prices.
Copper inventories in LME warehouses rose 2,175 tonnes to a five-year high of 424,625 tonnes, while stocks in warehouses monitored by the Shanghai Futures Exchange rose 4 per cent on the week ended Thursday.
Prices for copper have slumped about 65 per cent since reaching a record high of $8,940 a tonne last July.
Among base metals “copper still appears to be the most vulnerable as it has not yet fallen to the same degree below estimated levels of marginal cost of production as has occurred in aluminum, nickel and zinc,” Deutsche Bank said in a note.
Aluminum dipped to $1,318 a tonne, the lowest price since October 2002, from $1,330.
Aluminum inventories in LME warehouses increased 16,625 tonnes to a fresh record high of almost 2.7 million tonnes.
“While producers such as Alcoa have already responded with production cuts, these are evidently not yet sufficient to balance out the drop in demand, especially from the car industry,” said Commerzbank in a note.
“Consequently, there is little scope at present for prices to advance, even though they are already lower than marginal production costs.”
It noted that falling energy prices have lowered output costs and so cut the incentive for producers to make more cuts.
Nickel fell to $10,932 a tonne from $11,000, lead to $1,057 from $1,074, zinc to $1,100 from $1,120, and tin to $11,005 from $11,395.
