Copper Futures broke above the 50 day moving average on Tuesday.

The Shanghai Futures Exchange reports that copper stockpiles in China declined last week by 18.4 percent to 73,241 tons. This represents the lowest level since May. China is the world's largest consumer of copper.

Mining Stocks Surge On Positive News From Peru

Mining stocks surged on Friday amid reports that the August 15 Peruvian quake had "little impact on mining operation".

Among Friday's leading mining stocks.........

Southern Copper Corp. (NYSE PCU)
Last Trade: 90.63
Trade Time: Aug 17
Change: Up 6.09 (7.20%)

Freeport-McMoRan Copper & Gold Inc. (NYSE FCX)
Last Trade: 76.90
Trade Time: Aug 17
Change: Up 3.83 (5.24%)

BHP Billiton Ltd reports that the Peruvian quake had "no impact" on operations at it's Antamina copper and zinc mine.

``At this stage we have no impact on our Antamina operations,'' Mark Lidiard, a London-based spokesman for BHP Billiton, said today in an e-mail. Melbourne, Australia-based BHP Billiton owns 33.75 percent of Antamina, Peru's largest copper mine. Xstrata Plc, based in Zug, Switzerland, holds a matching stake.

Metal Markets Digest Impact Of Peruvian Quake

Mining companies throughout Peru are currently assessing the impact and possible damage caused by Wednesday's earthquake. The U.S. Geological Survey reports the earthquake hit at 7:40EDT in an area 90 miles southeast of Lima at a depth of approximately 25 miles. The quake had a magnitude of 7.9

Mining-Profits.com will have updated news and information as it becomes available.

Companies with mining operations in Peru:

* NEWMONT MINING CORP
* SILVER STANDARD RESOURCES INC.
* CHAPLEAU RESOURCES LTD.
* CIA. MINERA ALGAMARCA S.A.
* EQUINOX MINERALS LIMITED
* GITENNES EXPLORATION INC.
* INCA PACIFIC RESOURCES INC.
* MACMILLAN GOLD CORP
* SOUTHERN PERU COPPER
* PERU COPPER INC
* FREEPORT-MCMORAN COPPER AND GOLD

Copper Aims To Test Record Highs...........

Copper closed the week at 359.30, and remains well above the 50 day moving average of 345.58

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Copper closed the week up 7 dollars and now sits just below the 50 day moving average of 345.62

Copper remains range bound and continues to trade below the 50 and above the 200 day moving average.

Copper has strong support at the 200 day moving average of 315. Prices have bounced off this level twice in recent weeks.

Industrial Metal Closing Prices 6-01-07

Metal LB in USD Cash 3 Month 15 Month

Copper 3.4067 3.3657 3.0663

Aluminum 1.2589 1.2755 1.2256

Nickel 22.8838 21.5888 17.6765

Lead 1.0664 1.0682 .9367

Zinc 1.6831 1.6831 1.5073

Industrial Metal Closing Prices 5-25-07

Metal LB in USD Cash 3 Month 15 Month

Copper 3.2396 3.2296 2.9778

Aluminum 1.2487 1.2623 1.2188

Nickel 23.1332 21.3438 18.0076

Lead .9779 .9866 .8868

Zinc 1.6375 1.6332 1.4869

Industrial Metal Closing Prices 5-18-07

London Metal Exchange May 18 '07
USD/LB Cash 3m 15m
Nickel 23.7229 22.2283 18.1551
Lead .9049 .9163 .8292
Tin 6.3049 6.2596 5.8627
Zinc 1.6468 1.6520 1.4982

USD/LB Cash 3m 15m
Aluminum 1.2614 1.2769 1.2261
Alum Alloy .9938 1.0138 1.0591
NA Alloy .9893 1.0115 1.0433
Copper 3.2931 3.2749 3.0028

Copper rallied on Tuesday on stronger than anticipated demand from China.

China's imports of copper and copper products from January through April are estimated at 1.1 million metric tons.

China's imports of refined copper, anode and copper alloy in April stood at 304,672 tons.

That was down by 6.5 percent from March's record of 307,740 tons but exceeded expectations.

Nickel prices gained $1,800 to $50,850 a ton

Zinc traded down by $19 at $3,936 and Lead moved up by $9 to $2,084 a ton

Zinc is currently up almost 40 percent since early February.

Copper prices fell in Shanghai trading on Monday, after a 25% rise in copper stocks last week. However, dealers said London prices could regain $8000 a ton on a positive technical outlook.

Shanghai July copper was at 68 880 yuan a ton at the close, down 540 yuan from Friday. Prices earlier climbed over 1 percent before easing.

"Imports will probably be fairly high again for April and I think that is why there is some selling around. May is quite often the peak for metals prices in the first half, so the market may be under pressure," a dealer in Shanghai said.

China'a refined copper imports were up nearly 150% in March to more than 200 000 tons and imports in the first quarter were almost 500 000 tons.

Peru's largest mining union has declared an end to their 5 day strike.

Union officials report that the government has responded to a number of its demands for greater benefits and improved conditions for contract workers.

"We have agreed to suspend our strike starting today," Luis Castillo, leader of the National Federation of Metallurgic and Steel Miners, told a news conference.

Copper hit a new 11 month high on Friday and nickel and lead set new contract highs.

Concerns over supplies and inventories, as well as a decline in the US Dollar continue to buoy price.

Many markets in Asia were closed this week due to the May Day holiday thus reducing liquidity across the global markets.

Peru continues to be an area of concern as 30,000 mining workers remain on strike. The miner are demanding higher wages and will vote later today on extending the strike.

A continued nationwide strike among miner in Peru, as well as strong demand from the US and Europe, moved copper prices higher on Thursday.

The LME reports further decline in copper inventories. Stocks have dropped by nearly 30,000 tonnes since the beginning of April. At 2.46 pm, LME copper for three-month delivery was up at 8,015 usd a tonne against 7,745 usd at the close Friday.

China's copper use will rise to 6.5 million metric tons by 2020

China's state-owned Xinhua News Agency reported on Wednesday that China's copper use will rise to 6.5 million metric tons by 2020 , citing estimates from a conference.

According to an estimate by London-based research company Bloomsbury Minerals Economics Ltd. China's consumption will rise 11 percent this year to 4.45 million tons.
Copper use has expanded in line with the nation's economy, which grew 11.1 percent in the first quarter.

Copper pulled back on Monday after a strike in Indonesia came to an end. However, analysts say strong Chinese demand should continue to drive prices.

China's refined copper imports in March hit the highest level ever, with total imports exceeding 200,000 tonnes for the first time, data from China's customs bureau showed.

Copper for three-months delivery on the London Metal Exchange fell to a session low of $7,820 a tonne before recovering to $7,900/7,910 at 0931 GMT, still down around 0.7 percent from Friday.

"Freeport McMoRan has reached a wage agreement with workers at its Indonesian Grasberg mine...This is going to ease the tight supply situation and thus weighs on copper," Dresdner Kleinwort said in a research note.

A four-day strike at the Indonesian Grasberg mine of Freeport-McMoRan Copper & Gold Inc. lifted copper prices above $8,000 last week but conditions are now returning to normal, the company said on Monday.

"During the strike our production was below average but with the situation normalising, we hope that production can return to normal," Mindo Pangaribuan, a spokesman for Freeport said.

The company will meet copper and gold output targets this year at its Grasberg mine despite the stoppage, a senior official at Indonesia's mines and energy ministry said on Monday.

Freeport McMoran Copper & Gold Inc. announced via e-mail that shipments of copper concentrate continue but the company is mining and milling copper at reduced rates due to labor issues at it's Grasberg mine in Indonesia.

Copper pulled back in Thursday's London trading.

July Copper fell $70, or 0.9 percent, to $7,915 a metric ton in trading on the London Metal Exchange.

Copper has gained more than 25 percent this year.

Copper for delivery in three months on the London Metal Exchange advanced for a fourth day on Wednesday, gaining as much as $41, or 0.5 percent, to $8,090 a ton. The contract, which settled at $8,049 yesterday, the highest close since July 14, traded at $$8,070 at 10:31 a.m. Jakarta time.

Copper prices rose on Monday to near seven-month highs as the market continued to show concern over supply delays in Argentina and a strike threat in Indonesia.

Copper for three-month delivery on the London Metal Exchange rose to a session high of $7,928, but came off in the afternoon on profit taking and ended at $7,730, still up $25 from Friday.

Copper is up almost 50% from the lows set in February. This 18 month chart of Comex Copper Futures ($COPPER) shows prices that are approaching the highs set in 2006. Unprecedented global demand should push copper prices to new records in the coming months.

Copper rose the most in more than six months in London on speculation that demand from Chinese buyers will keep expanding. Lead advanced to a record and tin reached its highest in 17 years.

Copper trading on the Shanghai Futures Exchange will resume on Feb. 26 after the weeklong Lunar New Year holiday. Chinese imports of copper and copper products jumped 44 percent in January from a year earlier, customs data showed Feb. 12. Chinese refined-copper imports in January were about 132,000 metric tons, almost double last year's average monthly imports of 69,000 tons, Macquarie Bank Ltd. said Feb. 19.

``We expect to see, post the Chinese New Year, more activity by Chinese buyers in the copper market,'' said Daniel Brebner, an analyst at UBS AG in London. ``We do expect to see considerable strength in copper over the next quarter or so.''

Copper for delivery in three months on the LME advanced $280, or 4.8 percent, to $6,070 a metric ton as of 2:21 p.m. local time. The contract earlier rose as much as 5.4 percent, the biggest intraday gain since Aug. 4. Today's gain pared this year's losses to 4.1 percent.

Copper edged down amid light selling and quiet trading conditions with Chinese players on a week-long holiday celebrating the Lunar New Year.

Tin hit a new contract high of 13,450 usd a tonne amid falling inventories and continued concerns over supply disruptions in Indonesia.

At 12.57 pm, LME copper for three-month delivery was down at 5,740 usd a tonne having shed 5 usd to settle at 5,805 yesterday.

'There's a relative lack of buying interest partly because of the Chinese holiday,' said Triland analyst, Roy Carson.

Copper retraced yesterday's strong gains as LME stocks edged higher, although prices continued to be underpinned by strong demand levels.

Copper stocks were up by 1,650 tonnes to 214,900 tonnes, said daily LME inventory data.

At 2.01 pm, LME copper for three-month delivery was down at 5,730 usd a tonne having risen 279 usd to settle at 5,749 yesterday.

'Fund buying is coming back in and copper is rising,' said Standard Bank analyst Mike Skinner, adding that today's dip was 'to be expected' because of profit taking.

While copper was moderately lower, all of the other base metals' prices were higher.

'Given the strong tone in the rest of the group, we don't think (copper)prices will stay down for long,' said Man Financial analyst Ed Meir.

Aluminium prices jumped again as market players mulled supply threats from Guinea, West Africa, where worker unions resumed strike action.

The renewed strike disrupted bauxite mining, and bauxite and alumina shipments by Guinea, the world's leading exporter of the ore.

Aluminium was up at 2,845 usd a tonne against 2,820 usd at the close yesterday.

Copper edged lower as traders focused on yet another rise LME inventories, overlooking data out earlier showing Chinese imports of unwrought copper and semi-finished copper products rose 44 pct in January over December.

At 1.15 pm, LME copper for three-month delivery was down at 5,540 usd a tonne against 5,580 usd at the close Friday.

Neil Buxton, managing director of GFMS Metals Consulting, said the market is not too worried about the rise in Chinese imports because global inventories are rising at the same time.

'There seems to be sufficient production available for the market to absorb higher Chinese demand,' he said.

The LME said in a daily report earlier inventories held in its warehouse rose by 425 tonnes to 216,050 tonnes. LME stocks have more than doubled since the start of last year.

Buxton said he expects copper might edge higher this week because there are some supportive factors in the market such as the possibility of strike action at Southern Copper's smelter in Peru.

A union at the smelter has set a strike deadline for Feb 19. It is expected to enter into new talks with Southern Copper this week.

'I think in the short term we might see some upward movement but I think there has to be quite a lot of bullish news around to turn around the overall downtrend in copper,' Buxton said.

Tin surged to 12,550 usd a tonne, after hitting a new all-time high of 12,750 usd earlier, after newswires reported at the weekend three directors at tin miner PT Koba Tin had been arrested on counts of illegal tin mining.

The company has also suspended shipments from the island of Bangka in Indonesia.

'I think the critical point is ... there aren't any other producers that can fill the gap being left by lower Indonesian production so further spikes don't come as a surprise,' Buxton said.

Separately, tin remains supported by news out Friday the Bolivian government has seized control of a tin smelter complex owned by Glencore.

In other metals, nickel was up at 36,390 usd a tonne against 36,150 usd, zinc rose to 3,140 usd from 3,130 usd, aluminium edged up to 2,702 usd against 2,700 usd while lead climbed to 1,660 usd from 1,615 usd.

The Zambian government proposed Friday to raise a tax on mining companies, aimed at helping the copper-rich but impoverished nation cash in on high global copper prices.

Finance Minister Ng'andu Magande said the government planned to negotiate with the mining companies on tax revisions.

But more than 70 percent of the population still lives in poverty, which has led to frustration with policies of recently re-elected President Levy Mwanawasa, evidenced in last year's bitter presidential elections. The distribution of copper benefits has become a key element of that debate.

Magande said the government wants to increase the country's royalty tax on copper earnings from 0.6 percent to 3 percent, increase the company income tax from 25 to 30 percent, and reintroduce a 15 percent withholding tax on dividends, interest, royalties and other mining sector transactions.

The existing 0.6 percent royalty tax, which is particularly low compared with taxes in other copper-producing countries, was put in place during an industry downturn early in the decade, when the Zambian government was desperate to attract foreign investment. Copper accounts for more than 60 percent of the southern African nation's exports.

Copper prices have since risen from less than US$1 per pound to more than US$3 per pound (about €5 per kilogram), driven in large part by growing demand from China. Zambian copper production rose by 7.9 percent in 2006, Magande said, from 459,324 metric tons to 492,016 metric tons. The mining industry now directly employs almost 50,000 people in Zambia, he said.

"At the time when copper prices on the international market were low, mining companies were offered tax concessions in order to make their projects viable," Magande said in prepared remarks. "Now that the prices are high, there is need to review these concessions so that the nation can benefit from increased earnings from the mining companies."

Talk of revising the copper tax has raised fears, however, of a backlash among foreign mining companies many of which entered into long-term contracts with the government.

Magande said the government would now seek negotiations with those companies "so that there is mutual consent by contracting parties to revise the tax regime to the new rates."

Phelps Dodge Corp., which has agreed to a buyout by copper mining rival Freeport McMoran Copper & Gold Inc., said Monday its fourth-quarter earnings surged due to sharply higher copper prices, even as production slipped.

Net income grew to $1.32 billion, or $6.50 per share, in the three months ended Dec. 31 from $121.3 million, or 60 cents per share, in the prior-year period.

Revenue surged 43 percent to $3.24 billion from $2.26 billion a year ago. Costs rose a more modest 7 percent to $1.88 billion.

The latest quarter included a special gain of $364.1 million, or $1.79 per share, while the 2005 quarter included a one-time charge of $204.2 million, or $1.01 per share. Excluding the gain in the latest quarter, Phelps Dodge would have earned $$4.71 a share.

Analysts polled by Thomson Financial forecast earnings of $4.28 per share, excluding one-time items, on $3.49 billion in sales.

Copper production fell slightly to 320,000 tons from 321,800 tons in year-earlier quarter. But copper prices averaged $3.206 per pound on the London Metal Exchange, up sharply from $1.951 in the year-ago quarter and down slightly from the $3.479 averaged in the third quarter.

Molybdenum production grew to 16.8 million pounds from 14.5 million pounds.

For the full year, earnings increased to $3.02 billion, or $14.83 per share, from $1.55 billion, or $7.69 per share. Revenue rose to $11.91 billion from $8.29 billion.

Phelps Dodge agreed in November to a $25.9 billion cash-and-stock takeover by Freeport McMoran. The deal, expected to close in March, would create the world's largest publicly traded copper company.

Phelps Dodge shares fell 72 cents to $123.55 in morning trading on the New York Stock Exchange. They are still near their 52-week high of $124.77.

Rising stocks knocked copper market sentiment on Friday, but analysts say expectations of strong demand growth from China will underpin the metal and possibly push prices back above $6,000 over coming days.

Nickel for three months delivery on the London Metal Exchange touched a new all-time high of $38,950 a tonne on worries about low stocks and supply shortages, while tin was hovering below this week's record high of $12,500.

Three-month copper traded down at $5,755 a tonne in the official rings from $5,850 on Thursday, when it touched a two-week high of $5,910.

"There is some profit-taking going on in copper, but it could go higher again in the afternoon," a trader said. "It's quite possible we could see $6,000 within days."

Stocks of copper in LME warehouses rose 4,325 tonnes to 207,700 tonnes, more than double the levels seen last January.

China's copper imports rose 59.4 percent year-on-year in December to 95,831 tonnes, suggesting consumers there were restocking after running down inventories through most of 2006.

"In the last week or so there's definitely been some price stability," said Adam Rowley, analyst at Macquarie Bank.

"There are some signs of increased consumer buying and obviously the Chinese import figures helped. Over the next couple of months if Chinese buying continues to pick up the market could be fairly balanced for a period."

Economic slowdown in the United States, falling demand and rising stocks have hit copper in recent months. Prices are down more than 30 percent since May's record high of $8,800.

Mining giant BHP Billiton Ltd./Plc. maintained its copper output in the second quarter but said price adjustments to sales would reduce its first-half earnings by $220 million, reflecting a declining world copper price.

BHP Billiton, the world's top miner, said its total copper production was steady at 300,700 tonnes in the three months to December 31, helped by strong contributions from its South American operations.

"Escondida achieved a quarterly production record due to continued ramp-up of the sulphide leach project, which produced 20,700 tonnes for the half-year ended December 2006," it said.

Increased mill runs and richer ore grades contributed to near record half-year and quarterly production at the company's Antamina, Peru, operation, BHP Billiton added.

In contrast, in 2001 BHP Billiton cut production runs in South America to help combat then-depressed copper prices of around $1,650 a tonne.

Copper traded at around $5,775 on Thursday. It hit a record high of $8,800 in May last year as miners struggled to keep pace with demand, but it has retreated in the face of uncertainty over the outlook for demand, forcing BHP Billiton to trim its earnings expectations.

Shanghai copper futures charged 3.3% higher on Wednesday as concerns grew about tight spot market supply and a major Chinese producer warned its warehouse stocks were very low.

"There is only a little refined copper in our warehouse. We are nearly empty now," Pan Qifang, a senior official at Jiangxi Copper, said.

Shanghai copper futures were sharply higher, with the most active March contract rising 1 730 yuan, or 3.3%, to 53&Nbsp;990 yuan a tonne by the midday break on Wednesday.

Jiangxi is China's largest copper producer, with an annual output of around 440 000 tonnes, most of which is sold on a long-term basis.

"Some of our mining facilities are under annual maintenance now, which I believe will impact production," Pan said.

He added that stocks were down to around 1 000 tonnes, and while the company was meeting its long-term obligations, it was unable to supply to the spot market.

A spot trader said: "Supply is short in Shanghai these days, especially for Chilean copper."

Spot copper prices in Shanghai were up 1 025 yuan, quoted between 56 650 yuan and 57 000 yuan.

"Import increases cannot meet demand in the domestic cash market as several Chinese smelters are being overhauled," Shen Haihua, an analyst at Maike Futures, said.

Copper for delivery in three months on the London Metal Exchange were $70 higher at $5 730 a tonne at 05:28 GMT.

THE slump in the copper price has been brought to a halt, at least temporarily, by renewed Chinese purchases.
Continued rapid growth by China and the prospect that the downturn in the US housing market will be short-lived is bringing buyers back to the market, with a possibility that prices may start climbing again later this year.

On Tuesday, the copper price reached its lowest point since last April of $US5470 a tonne in trade on the London Metals Exchange (LME).

However, the price bounced to $US5710 following reports of falling LME stocks, particularly in its warehouses in Singapore and South Korea.

A build-up in LME stocks to 199,500 tonnes, about double their level of a year ago, has been the main reason for the plunge in the copper price from its $US8500-a-tonne peak reached in May.

Citigroup commodities analyst Alan Heap says one of the reasons for the accumulation of stocks was lower demand from China.

"Apparent consumption was very subdued, because of a combination of substitution of other materials and de-stocking by consumers."

The bureau that holds China's strategic stocks of copper also transferred some of its metal to LME warehouses in Asia. Although shifting stocks from one place to another does not alter the global supply, the LME stocks are recorded, whereas the Chinese strategic stocks are not.

Mr Heap said China's imports of copper, in all forms, reached 220,000 tonnes in November, compared with an average of 150,000 tonnes a month in the first half of last year.

Industry newsletter Metals Insider calculated that Chinese imports of refined copper metal were just under 100,000 tonnes in December, which is the highest since the peak of the Chinese metals boom in the third quarter of 2005.

It said the strength of Chinese demand explained why copper was selling on the Shanghai exchange for $US130 a tonne more than in London.

Mr Heap said the downturn in the US housing market was still depressing US copper consumption. New housing accounts for about 30 per cent of copper demand in the US. The US motor industry has also been weak.

However, there is a growing conviction that the housing downturn will be short-lived, and that it will have little effect on other sectors of the US economy or on the world economy at large.

International Monetary Fund managing director Rodrigo de Rato presented an upbeat assessment of world economic growth on Tuesday, arguing that it would reach almost 5 per cent, making the strongest five-year run of growth in 30 years.

"While the US economy has slowed down, in large part due to the correction in the housing market, a soft landing now seems more assured as lower energy prices have supported employment growth and consumption," he said.

Copper prices rose in New York for the second-straight day on concern output by Chile's state-owned Codelco, the world's biggest producer, may be disrupted.

Codelco said yesterday a rockslide may occur at the Chuquicamata mine, the company's largest. A cave-in there last year cut output. Copper prices reached a record $4.04 a pound in May after strikes and mine accidents curbed production.

``Chile is still struggling to boost its output of copper and other non-ferrous metals, lagging behind producers in Africa and Asia,'' John Kemp, a London-based analyst at Sempra Metals, said in a report.

Copper futures for March delivery gained 4.25 cents, or 1.7 percent, to $2.5985 a pound at 9:13 a.m. on the Comex division of the New York Mercantile Exchange. Prices gained 1.1 percent yesterday, snapping a six-session slide.

Before today, the metal had dropped 11 percent this month after climbing 41 percent in 2006, the fifth-consecutive annual gain.

A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date.

``I'm looking for a close above $2.70,'' said Win Chung, a trader at Triland USA Inc. in New York.

Inventories monitored by the London Metal Exchange rose 0.2 percent to 193,825 metric tons. Stockpiles fell 1.2 percent yesterday from the highest since March 2004.

``The Codelco story could cause some nervousness, but copper needs to put together a string of gains'' before buyers ``come back in any meaningful way,'' Edward Meir, an analyst at Man Financial Inc. in Darien, Connecticut, said in a report.

China

Copper users in China, the world's largest consumer of the metal, may rebuild stockpiles after prices tumbled, according to a Bloomberg survey yesterday of seven analysts, traders and processors.

China accounts for 20 percent of the annual world's copper consumption, while Asia accounts for 50 percent, John Tumazos, senior vice president at Prudential Equity Group LLP, said yesterday. The U.S. consumes about 13 percent of the metal, and Europe accounts for 20 percent of the annual consumption, he said.

Copper prices extended last week's heavy losses on Monday as rising stocks in London Metal Exchange warehouses heightened worries about a slowdown in demand.

The fall in copper dragged other metals lower, with lead, zinc and nickel falling by around 4 percent.

"The market has been in a downward channel during the past few weeks...things look weak both technically and fundamentally," a European LME trader said.

Copper futures for delivery in three months were at $5,485/5,505 a tonne at 1129 GMT, down from $5,611 at the close on Friday, when the market dropped by more than 2 percent.

"There is nothing really on the charts to support copper until $5,165," analyst William Adams at BaseMetals.com said.

A Macquarie report said prices would inevitably bounce back as most metals were oversold, but in the short term prices were seen drifting to around $5,000.

Copper's recent fall has come against a backdrop of worries about slowing global growth prospects and rising supply of many key industrial commodities.

Stocks in LME-registered warehouses, seen as a gauge of demand, had risen by more than 12,000 tonnes over the past week.

Another 900 tonnes entered stores on Monday, taking the total to 195,775, the highest since March 2004.

Analysts said the market might change direction in mid-February, when the Chinese were likely to re-stock.

"Chinese New Year on 18th February should see new buying interest from consumers in both physical copper and copper concentrates," John Meyer at Numis Securities said in a note.

At the same time, traders said there was talk the Chinese had lowered their purchasing targets in copper.

"So maybe we will see less support than people hope and it could easily drift down lower fairly quickly," the trader said.

Goldman Sachs said prices could go higher again at the end of 2007 as global growth would pick up.

"While prices in the interim are likely to remain volatile, we continue to believe that prices will see renewed upside momentum towards the end of 2007 and the beginning of 2008," the investment bank said in weekly commodities note.

COPPER DRAGS OTHERS DOWN

On Friday the slide in copper dragged aluminium down by over 3 percent to a close at $2,610. Aluminium was indicated at $2,579/2,584 on Monday.

"If we can get back above $2,700...then the market could be looking quite bullish again," Adams at BaseMetals.com said.

Zinc was at $3,720/3,745, down 4.9 percent versus its close at $4,085 on Friday, when the metal dipped by a similar amount.

"The feeling is that zinc concentrates are becoming more available and there could be a lot of stock on its way to warehouses," another LME trader said.

Stocks in LME-registered warehouses rose by 725 tonnes to 90,975, up by some 7 percent since the start of December.

The Dow Jones AIG index with some $30 billion in assets was putting additional pressure on the markets.

"The re-indexing of the funds and the weakness of the oil price have triggered a lot of liquidation selling and it has caused a lot of CTA (Commodity Trading Advisor) types to go short," Adams said.

Nickel was down 3.8 percent at $31,850/32,000 versus $33,100, and tin was indicated at $10,450/10,550 against its last quote on Friday at $10,600/10,625.

Lead fell by 5.6 percent to hit $1,530 and was later indicated at $1,540/1,550 versus $1,620.

Copper for delivery in three months ended the official LME ession at $5,750 per tonne, up $20 from Thursday's kerb close.

At around $5,700, copper is 35 percent below its peak of $8,800 in May last year but still more than double its price three years ago.

"Copper has moved away from the lows aided by consumer bargain hunting and a further rise in cancelled warrants," UBS metals strategist Robin Bhar said.

Cancelled warrants, which indicate metal will soon leave warehouses, stood at 17,325 tonnes on Friday, up from around 6,000 at the beginning of the week.

Analysts said users of copper in China, the biggest consumer of the metal, would be looking to pick up supplies after the big price drop.

Other market sources said Chinese consumers would remain cautious, expecting further falls in prices.

"Chinese fabricators are not willing to buy large volumes of copper," said Zhou Yixing, a senior trader with Jiangsu Suwu Futures.

Copper's fall has come against a backdrop of worries about slowing global growth prospects and rising supply of many key industrial commodities.

"I am a trend-follower and I am very happy to be so in markets like this. I would hate to have to try and work out the fundamental outlook for these things," a U.S. fund manager said.

"People need a clearer picture. The employment numbers are due later and traders tell me they are not going to touch anything until then."

U.S. non-farm payrolls data for December are due at 1330 GMT, with analysts predicting a rise of 100,000 jobs.

"Copper prices have been falling since mid-December as sentiment deteriorated against rising LME inventories and a perception of slowing demand, especially in the USA," said Peter Richardson, chief metals economist at Deutsche Bank.

Stocks in LME-registered warehouses, seen as a gauge of demand, have risen by more than 12,000 tonnes this week. Another 1,700 tonnes entered stores on Friday, taking the total to 194,875, the highest since March 2004.

Stocks in Shanghai Exchange warehouses fell 257 tonnes in the week ended Thursday to 31,043 tonnes.

Nickel stocks fell 150 tonnes in London on Friday to 6,084 tonnes, just over 1.5 days of global consumption, while the premium for cash metal, or backwardation, flared to $900/1,100 a tonne, from $700 at the end of 2006.

Nickel ended the official session at $33,900, down $300.

Aluminium was down $20 at $2,680 and zinc was down $35 at $4,050.

Tin was indicated at $10,795/10,800, down $80 from Thursday's last quote, and lead was at $1,660/1,663, down $25.

Mining stocks Xstrata and Rio Tinto were lower by early afternoon in London, all three declining more sharply than the FTSE 100 index.

Copper fell to an eight-month low in New York, extending a slide that began in May, as a slowdown in U.S. housing and rising inventories fueled concern that demand will lag behind supply.

Prices have fallen 36 percent from a record high on May 11 as new-home construction in the U.S. fell the most in 15 years and global stockpiles of the metal rose to the highest levels in more than a year. Builders are the biggest users of copper in the U.S., the world's second-largest consumer.

``It's going to be a long time before residential housing bounces back,'' said Michael Smith, owner of T&K Futures and Options Inc. in Port Saint Lucie, Florida. ``Housing is such a big consumer. It's going to be tough on old copper, unless something changes.''

Copper for delivery in March fell 7 cents, or 2.6 percent, to $2.579 a pound at 8:50 a.m. on the Comex division of the New York Mercantile Exchange. Prices earlier touched $2.5565, the lowest since April 5. The metal plunged 7.7 percent yesterday, the biggest drop since June.

Copper futures still gained 40 percent last year on supply disruptions. A futures contract is an obligation to buy or sell a commodity at a fixed price for delivery by a specific date.

On the London Metal Exchange, copper for delivery in three months fell for a third session, dropping $180, or 3.1 percent, to $5,675 a metric ton. The metal declined below $6,000 a ton yesterday for the first time since April.

Copper dropped the most in three months in London, trading below $6,000 a ton, on expectations a private report will show U.S. manufacturing industry is stagnating. Zinc had its largest drop in more than six weeks.

Copper, used in wires and pipes, is erasing part of last year's 44 percent gain as supplies increase and consumption growth slows. U.S. manufacturing was on the verge of shrinking in December, economists expect a report from the Institute for Supply Management to show today. The U.S. is the second-largest user of copper, after China.

``We will see more weakness in demand and prices in 2007,'' said Jean-Bernard Guyon, who manages about $211 million at Global Gestion France in Paris. Guyon doesn't hold copper- related stocks and has reduced his holdings in nickel and zinc shares, he said without elaborating.

Copper for delivery in three months on the London Metal Exchange lost $218, or 3.6 percent, to $5,892 a metric ton as of 2:22 p.m. local time. It's the first time copper has traded below $6,000 since April 12. The contract earlier fell as much as 4.6 percent, the largest intraday loss since Oct. 4. Zinc, used to galvanize steel, had its largest one-day loss since Nov. 17, falling as much as $210, or 5.1 percent, to $3,920 a ton.

The ISM's manufacturing index was at 50 in December, compared with 49.5 in November, according to the median forecast of 60 economists surveyed by Bloomberg News. A reading below 50 signals a contraction. The November reading was the first slowdown in more than three years. The Tempe, Arizona-based institute will release the report at 10 a.m. Washington time.

Price Quadruples

Copper futures for March delivery fell 19.55 cents, or 6.8 percent, to $2.6755 a pound on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest percentage drop since June 13.

The metal has quadrupled since 2002, and traded at a record $8,800 a ton May 11, as China's booming economy combined with strikes and disruption at mines from Indonesia to Chile to put a squeeze on supplies. Mining companies such as Chile's Codelco, the world's biggest producer, and BHP Billiton Ltd. have since ramped up production to take advantage of the higher prices.

``The scarcity fear is going to disappear,'' said Peter Fertig, a commodity analyst at Dresdner Kleinwort in Frankfurt. A U.S. slowdown ``clearly reduces demand for the metal.''

Further declines in copper are likely, said analysts including Neil Buxton at London-based GFMS Metals Consulting Ltd. A drop below $6,000 a ton would trigger more technical chart-based selling, sending prices toward $5,000, Fertig said. He expects prices to rebound on increased orders from China later this year.

Goldman Sees $5,500

``We have a lot of people sitting on the fence, waiting to place orders,'' said Charles Molnar, owner of Molnar Tools Inc. in Ocean, New Jersey. ``They are waiting for prices to come down.'' Molnar uses about 200,000 pounds of copper a year.

Copper's so-called relative strength index dropped to 21.39 today, suggesting a rebound. The index is used by some investors as a gauge for price direction. A reading below 30 usually indicates the commodity is due for a gain.

The benchmark three-month price probably will fall to $5,500 by the end of this year as supply beats usage by 230,000 tons, Goldman Sachs Group Inc. analysts led by James Gutman in London said in a Dec. 11 report.

LME-monitored copper inventories gained 1,975 tons, or 1 percent, to 192,550 tons, the exchange said today in a daily report. The stockpiles more than doubled last year, easing a shortage.

Mining Stocks Drop

Mining stocks also dropped. Shares of BHP Billiton lost as much as 3.4 percent in London, the most in more than three weeks. Xstrata Plc, the world's second-largest producer of nickel and fourth largest for copper, fell as much as 5.3 percent.

Some producers tried to take lock in copper prices before further declines. Boliden AB, Scandinavia's only copper producer, extended its hedging program by two years through 2009 to secure funds for its 5.3 billion kronor ($780 million) expansion of the Aitik mine.

The company has sold 70 percent of its 2007 production at an average price of $6,394 a metric ton, Stockholm-based Boliden said today in a statement. Seventy percent of output in 2009 is hedged at $5,920.

Other LME-listed metals contracts declined. Aluminum dropped $70 to $2,715 a ton and nickel fell $175 to $32,300. Lead slipped $2 to $1,650, and tin was $475 percent lower at $10,975.