Gold Futures Kept in Check

"Copper's overall tight conditions may rise to the surface again, although this time with the market already destocked, conditions may tighten up quickly," writes William Adams, a metals analyst with BaseMetals.com, in a research report. He notes that China supplied a significant portion of its internal copper needs last year by drawing down existing inventories rather than importing.

"With the destocking now likely to be winding down, the impact of strong real consumption may start to be felt far and wide," says Adams.

Elsewhere, copper miner Phelps Dodge(PD Quote) reported better-than-expected earnings, but investors shrugged and the stock closed down 2.3% at $121.45.

As for ferrous metals, KeyBanc Capital Markets initiated coverage on shares of Claymont Steel(PLTE Quote) with a hold rating. The stock rallied after earlier weakness to close 1% higher at $19.