Cyprus, supply anxieties tarnish copper prices

Chinese copper futures slipped Friday after clawing back some of their losses earlier last week due to underlying supply concerns.

The most traded copper contract on the Shanghai Futures Exchange (SHFE), for July delivery, fell 0.27 percent Friday to finish the week down 2.63 percent at 55,630 yuan ($8,955.10) per ton. The contract fell 3.4 percent Monday and recovered some of the losses Thursday and Friday.

The three-month copper contract on the London Metal Exchange (LME) lost 1.1 percent to end the week at $7,668 per ton. The LME contract had fallen to a seven-month low of $7,486.25 per ton Tuesday.

The contract lost about 2 percent Monday, in part because of a buildup in warehouse stockpiles, according to commodity analysts at the Australian bank ANZ.

"Setting the negative tone for copper in recent days has been the release of LME and SHFE copper warehouse stocks showing another weekly rise. This has left the market particularly sensitive to weakness in financial markets," the analysts wrote early Tuesday.

LME copper stocks climbed to their highest levels in nearly a decade, hitting 562,475 tons, Reuters reported.

Concerns about the bank crisis in Cyprus also took a heavy toll on the commodity.

Both LME and SHFE copper futures recovered Wednesday and Thursday on a surprise jump in a preliminary gauge of Chinese manufacturing.

SHFE zinc led declines in other Chinese base metals. The most traded contract, for June delivery, ended up losing 2.57 percent last week to close at 14,950 yuan per ton. Meanwhile, the June aluminum contract fell 0.94 percent to close at 14,700 yuan per ton, and the May lead contract surrendered 1.59 percent to 14,500 yuan per ton.