Outside of nickel, the base metals were all on fire on Friday. Copper rose straight from the pre-dawn hours until the late morning, only then coming off its intraday highs to finish at $3.866/lb., up nearly 8 cents.

Nickel flirted with the $12 mark around mid-morning, but then collapsed, closing at its intraday low of $11.7972/lb., down almost 11 cents. Zinc’s fuse was lit early in the pre-dawn hours and it rallied all day long, just coming off its intraday high to end at $1.0523/lb., up 4 cents. Aluminum also came well off its mid-morning highs but managed a gain of 2 cents, to $1.3504/lb., while lead was up sharply, easing just a bit late to $1.0496/lb., up more than 3¾ cents.

Copper rose to a one-week high, primarily on the declining dollar and inflation fears.

In addition, labor issues “still fester in the background, lending support” to the copper price, wrote Edward Meir, of MF Global.

Indeed, early in the day, leaders of a group representing employees of contractors for Codelco, the world’s biggest producer, said they might resume protests because workers had not received bonuses under the agreement that ended the recent strike.

In response, Codelco said that 23,000 contract workers have received bonuses, and Chile’s government said it is complying with the May 5 agreement.

But the market is delicately balanced. “What we have got on the downside are concerns about falling Chinese demand. Until we see that pick up, it is unlikely we are going to see a significant push higher,” said Barclays Capital analyst Gayle Berry, over against “what prevents (copper) from falling too far is still these supply-side concerns.”

Meanwhile, zinc headed for it best weekly gain since February, as traders remained uneasy about the extent of earthquake damage to processing facilities in China.

“If it’s sustained damage, it’s going to be a disruption that makes markets nervous,” said Giles Lloyd, a zinc analyst at London-based researcher CRU in London.

And as an additional side effect, “now there is likely to be even more demand for metal[s] as fabricators gear up for the reconstruction that will be needed following [the quake],” said BaseMetals.com’s William Adams.

In company news comes word from Australia that the major public servant-funded superannuation funds in that country have ruled out any plan to team with Chinese interests in a raid on BHP Billiton shares, undermining the latest in a string of rumors that has driven BHP’s shares to record levels.

Source: Base Metals Mostly Sharply Higher