Copper extended a pull-back from an earlier two-week high Friday, after Spain's credit rating was downgraded, bringing concerns about euro-zone debt issues back into focus ahead of a long holiday weekend.
Fitch Ratings cut Spain's credit ratings one notch, saying its economic recovery would be more muted than the government forecast due to strict austerity measures passed this week.
"This is removing the calm from the storm," Sterling Smith, an analyst for Country Hedging Inc. in St. Paul, Minn.
"The fundamental problems that are going on have not gotten away or changed at all this week. We had just simply moved into a holiday mode, and this served as a reminder to people that there is still trouble out there."
Benchmark copper on the London Metal Exchange pulled further away from an earlier two-week peak at $7,043 (U.S.) per tonne, to drop back down below $6,900 after the news hit.
Copper for July delivery ended down 5.40 cents, or 1.7 per cent, at $3.1045 per pound on the New York Mercantile Exchange's Comex division, down from an earlier two-week peak at $3.1870.
Weak U.S. economic data added to the late selling pressure, as investors cashed in recent gains ahead of a long weekend in the United States.
U.S. consumer spending was unexpectedly flat in April while business activity in the U.S. Midwest grew less than expected in May as employment declined. U.S. stock markets fell in response, overlooking a modest rise in consumer sentiment.
"The data is definitely having an impact because the question is, is this [euro zone debt]crisis weakening the global economy? [But]we sense we're getting into calmer waters now and people will start looking at fundamentals and realise things are not that bad on a global scale," said Arne Lohmann Rasmussen, chief analyst at Danske Bank.
A sharp fall in the euro against the U.S. dollar following the downgrade added to the downside pressure in metals complex, as a weaker euro makes metals costlier for European investors.
Of particular interest to investors is next week's ISM surveys. If Europe's troubles are slowing down the U.S. economy, the first place that would likely show up is in the manufacturing ISM's new orders component index.
"We are not out of the woods yet," said Andrey Kryuchenkov, analyst at VTB capital. "People will be looking outside Europe for the moment ... Stocks will matter later in the year."
On the plus-side however, copper stocks in LME warehouses continued their descent. Latest data showed a 1,050 tonne fall to 476,725 tonnes, a drop of nearly 15 per cent since the middle of April. Also on the radar were LME stocks of tin, down more than 25 per cent since late January to 20,060 tonnes, the lowest since September, 2009.
The world's largest tin producers are China and Indonesia.
"At 2,400 tonnes, China's tin imports rose in April to their highest level since May, 2009, which implies strong demand," Commerzbank said, adding that low investor interest in tin was one reason why the price was more stable.
Tin hit a four-week high of $18,250 a tonne, before ending down $90 at $17,900 a tonne. After the close, it was trading at $17,800. Zinc ended down $4 at $1,936, and was trading at $1,925 in after-hours business. Lead was last bid in session rings at $1,849 from $1,844. It fell after hours to $1,830. Nickel at $21,350 from $21,800.
Zinc and lead hit $1,966.75 a tonne and $1,874.75 a tonne respectively, their highest since May 17.
Aluminum was last bid at $2,042 from $2,065. After hours it was trading at $2,030.