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Copper pares gains by LME close, consolidating

LONDON, April 25 (Reuter) - London Metal Exchange (LME) copper failed to build on earlier gains by Thursday's close as prices dipped back under speculative selling and profit-taking to end only $5 a tonne up on Wednesday's close of $2,605.

Traders said copper had earlier chased to a near four-month high of $2,631 on the back of robust cash buying but it lacked follow-through interest. "Its still consolidating but is finding good support from tight nearby spreads," one trader said. Copper's cash/three months backwardation was last indicated at around $100, up on Wednesday's close of $85/$90 and the single figure backwardation that prevailed in early April.

Friday's LME stock data is likely to hold the key to the markets next short-term direction.

An expected small fall in stocks by some market makers may boost upside sentiment and push prices towards resistance at the January 2 high of $2,650. "The market is not due to move much until the stocks data is released on Friday," one trader commented.

Other metals in line with copper dipped from their highs, though they continued to gyrate in narrow ranges. Aluminium was last at $1,619, up $10, after attempting to overcome resistance above $1,620.

Traders said aluminium is expected to consolidate near-term but they remained divided about the markets next direction.

"Like copper aluminium is expected to be influenced by the LME stocks...its wait and see at the moment," a trader said. Support for aluminium was seen at $1,600. Nickel continued to build a base above $8,100 but was closely eyeing the copper market. It was last at $8,130, versus $8,085.

A tight physical market continued to underpin lead which settled $2 lower at $805. LME lead inventories are expected to show a fall on Friday.

Zinc on trade short-covering moved $10 higher to $1,074, while tin continued to correct from its recent oversold condition to finish at $6,595, against $6,525. Alloy was indicated at $1,370/80, little moved.-Reuter