London 18/05/2012 - Base metals rose after an uncertain open to Friday LME premarket trading, largely tracking an uptick in the euro, which is generally setting direction, traders said.
"It has been more down than up this week so we are seeing a bit of short-covering ahead of the weekend - but it all depends on currencies and other events really," a trader said.
The euro was around 1.2685 against the dollar, attempting to move back above 1.27, after earlier setting new four-month lows of 1.2640. But the currency and markets remain vulnerable given ever-present eurozone turmoil surrounding Greece.
Business is expected to be choppy in the countdown to the weekend, given that a G8 summit starts today in Washington and a European heads-of-government meeting is pencilled in for next week.
"I don't anyone expects anything really dramatic this weekend but they are just going to square up or reduce positions," the trader added.
"The funds are short, the CTAs are short and the hedge funds are short and in the money at these levels," he added.
The mood was not helped overnight by the credit ratings of 16 Greek banks being cut again by Moody's, while Fitch, another agency, cut the country's long-term credit rating.
Traders said these concerns over Greece remain to the forefront, with weeks of uncertainty in prospect ahead of fresh elections that are due to be held in mid-June.
Macroeconomic shocks throughout the financial sector have been generated by the growing concerns of a Greek exit from the 17-strong eurozone, which would not only trigger further sovereign debt contagion but also send many economies back into recession.
COPPER PERKS UP, REGAINS $7,700/T BUT INVENTORIES UP AGAIN
Copper climbed from early levels near the mid-week four-month low of $7,625 per tonne to regain $7,700, with recent business at $7,725, up $76 from Thursday. But warehouse stocks rose for the second day in a row - up a net 3,725 tonnes to 221,175 tonnes due to 4,150 tonnes warranted in Busan.
This is widely believed to be Chinese deliveries of previously bonded metal. On Thursday, 5,275 tonnes were registered in Korean warehouses as well.
Aluminium, which has been resilient all week above the psychologically important $2,000 level, traded at $2,059, a $5 gain from yesterday, after stocks fell 7,725 tonnes to 4,975,175 tonnes.
In other metals, zinc business at $1,907 was up $7. But stocks rose by 3,775 tonnes to 944,025 tonnes, a fresh high since May 1995. Lead traded at $1,949, a $22 gain, after a 1,050-tonne stock fall to 357,925 tonnes
Tin's woes continued, however, with prices hitting $19,150 at one point, a fresh low since January 4, before settling at $19,300, up $100 - there was a 75-tonne stock increase. Nickel was slightly lower at $17,15, against a previous $17,195 - stocks climbed 618 tonnes to 106,182 tonnes.
Steel billet traded at a steady $470, while in the minor metals cobalt and molybdenum were both neglected.
(Editing by Mark Shaw)