METALS-Copper rises as dollar pressured by weak U.S. jobs data

Susan Thomas and Harpreet Bhal
Friday, 10 Jan 2014 | 10:16 AM ET

* U.S. nonfarm payrolls up 74,000 in Dec, smallest rise since 2011

* Dollar slides against basket of currencies

* China's copper imports up 1.3 percent in December

(Updates prices, adds comment, U.S. data)

LONDON, Jan 10 (Reuters) - Copper rose on Friday, lifted by a weaker dollar after worse-than-expected U.S. labour market data reinforced the view that the U.S. Federal Reserve is likely to be less aggressive in scaling back its stimulus programme.

Three-month copper on the London Metal Exchange traded at $7,295 a tonne at 1456 GMT, up from a last bid of $7,213 on Thursday.

U.S. employers hired the fewest workers in almost three years in December but the setback was likely to be temporary as there were signs that cold weather might have had an impact.

The data prompted a broad-based drop in the dollar, making commodities priced in the U.S. unit cheaper for holders of other currencies.

The Fed announced in December that it would trim its monthly bond-buying programme to $75 billion from $85 billion. The stimulus has been a major driver for global risk assets such as metals, and moves to taper purchases are expected to underpin the dollar.

"The withdrawal of stimulus from the U.S. will be a headwind for metals as will a stronger U.S. dollar," said Gayle Berry, analyst at Barclays, adding that any falls in copper prices would be limited by signs of a tightening market.

"We have had (copper) supply disruptions and Chinese import demand has been very strong. That, alongside falling inventories, means there is not a lot of material around."

China's imports of copper rose 1.3 percent to 441,291 tonnes in December from 435,613 tonnes in the previous month, data from the General Administration of Customs showed.

China is the world's largest copper consumer, accounting for around 40 percent of global demand.

Highlighting dwindling supplies, copper stocks in LME-registered warehouses fell by 4,375 tonnes to a fresh one-year low, exchange data showed.

"As far as the base metals are concerned, China will loom larger than any U.S. macro readings and numbers out of that country will likely be the dominant price-setting variable for now," said Ed Meir, analyst at INTL FCStone.

Benchmark three-month aluminium was at $1,765 a tonne, up from a close of $1,749, but was still hovering near multi-year lows in a market awash with the metal.

Reflecting a tough outlook for the aluminium market, Alcoa Inc reported a massive quarterly loss on Thursday after recent declines in aluminium prices led to a $1.7 billion non-cash impairment charge on smelter acquisitions.

About 4.5 million tonnes of aluminium smelting capacity may come onstream in China this year, according to China metals company SMM. That would boost production to about 28.3 million tonnes this year from 24.9 million tonnes in 2013, creating a surplus of about 700,000 tonnes in 2014.


Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Three month LME tin

($1 = 6.0550 Chinese yuan)

(Additional reporting by Melanie Burton,; Editing by Anthony Barker)