Copper pushed past $3.97 in the pre-dawn hours, but couldn’t hold there once New York trading began, as it declined through most of the day, just coming off its intraday low to finish at $3.9133/lb., down more than 3½ cents.

Nickel traded narrowly all day, to little end result as it closed at $12.9667/lb., down 2 2/3 cents. Zinc rallied sharply just after the open but gave most of it back, ending at $1.0247/lb., up a third of a cent. Aluminum also peaked in the pre-dawn hours and slumped from there, shedding nearly a penny and a half to $1.3387/lb., while lead also declined, dropping 2 1/3 cents, to $1.2834/lb.

Copper fell after it was clear that the dollar was strengthening, reducing the appeal of the base metals for inflation hedging purposes.

Underscoring the trend, Edward Meir, of MF Global, wrote that, “We still expect metals to continue to take their cue from the dollar.”

Nevertheless, “There’s general commodity strength that’s constructive for the red metal,” said Eric Wittenauer, of Wachovia Securities in St. Louis. Despite the weak showing, the UBS Bloomberg Constant Maturity Commodity Index still rose 0.9% yesterday, to 1,526.792, and is up 18% already on the year.

Some analysts are saying that the pullback is only a minor technical correction, and argue that prices could bounce back because of ongoing tightness in the copper market, with the threat of supply disruptions adding an extra kicker.

Alex Heath of RBC Capital Markets said that, “Fundamental factors — supply disruptions — wait in the wings and remain high in probability which in turn could force the market right back to test the highs.”

However, a potential rise in the copper price was capped by rising supply. Inventories monitored by the LME gained 900 metric tons yesterday, to 117,150 tons.

In aluminum news, Moscow-based Rusal, the world’s largest producer, increased output in the first quarter to 1.1 million tons from 1 million tons a year earlier, the company said. Aluminum prices are bound to rise, due both to surging demand in China and a decline in the value of the dollar, Rusal’s CEO said.

And tin is on a tear, as prices rose to a fresh all-time high as LME-monitored stocks fell for the eighth day in a row to hit their lowest level since 2005. There were also reports that Indonesia, the world’s second-largest producer, will further limit its output this year.