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METALS-London copper steadies, shielded by softer dollar

MELBOURNE, Feb 5 (Reuters) - London copper steadied on Monday but looked fragile as risk-off selling swept through Asia's stock markets, threatening to pressure metals that had found near-term support in a softer dollar.

FUNDAMENTALS

* COPPER: London Metal Exchange copper held up by a meagre 0.2 percent amid a flat to lower complex, trading at $7,059 a tonne by 0127 GMT. Prices dropped 1 percent on Friday when they hit the highest in a week at $7,188.50 before falling into the close. On the Shanghai Futures Exchange where prices have trended lower since late December, copper stayed down by 0.5 percent at 52,950 yuan ($8,407) a tonne.

* U.S. job growth surged in January and wages increased further, recording their largest annual gain in more than 8-1/2 years, bolstering expectations that inflation will push higher this year as the labour market hits full employment.

* PERU PRODUCTION: Higher supply overhung the market after Peru, the world's No. 2 copper, zinc and silver producer, reported a substantial rise in production of its main base metals in 2017. Copper production grew 3.9 percent to 2.4 million tonnes, while zinc production surged by 10.2 percent to 1.5 million tonnes.

* NICKEL: LME nickel slipped by 0.3 percent, adding to Friday's 4 percent plunge that was fanned by expectations of growing nickel ore exports from Indonesia.

* LEAD: Lead prices took a breather from a 6-1/2-year top of $2,685 from Friday to tail back by 0.7 percent.

* ALUMINIUM: Russian aluminium maker Rusal said on Monday that China's winter capacity cuts will result in an annualised production loss of 1 million tonnes of aluminium as it forecast that China's aluminium demand surged by 7.8 percent to 34.9 million tonnes.

* CHINA LOGISTICS: China's worst blizzard this winter exposed a flaw in Beijing's drive to create remote coal mining hubs as it tries to streamline heavy industries and clear the air in populated regions: a lack of railroads to get the fuel to market.

* INVESTORS: Hedge funds and money managers cut their net long position in COMEX copper futures and options in the week to Jan. 30, U.S. Commodity Futures Trading Commission (CFTC) data showed.

MARKETS NEWS

* Asian share markets stumbled on Monday as fears of resurgent inflation battered bonds, toppled Wall Street from record highs and sparked speculation central banks globally might be forced to tighten more aggressively.

DATA AHEAD (GMT) 0145 China Caixin services PMI Jan 0850 France Markit services PMI Jan 0855 Germany Markit services PMI Jan 0900 Euro zone Markit services PMI final Jan 0930 Euro zone Sentix index Feb 1000 Euro zone Retail sales Dec 1500 U.S. ISM non-manufacturing PMI Jan PRICES

BASE METALS PRICES 0126 GMT Three month LME copper 7054 Most active ShFE copper 52880 Three month LME aluminium 2201.5 Most active ShFE aluminium 14325 Three month LME zinc 3495 Most active ShFE zinc 26650 Three month LME lead 2661.5 Most active ShFE lead 19615 Three month LME nickel 13345 Most active ShFE nickel 101070 Three month LME tin 21555 Most active ShFE tin 148610

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 1163.54 LME/SHFE ALUMINIUM LMESHFALc3 -1725.79 LME/SHFE ZINC LMESHFZNc3 504.76 LME/SHFE LEAD LMESHFPBc3 -616.95 LME/SHFE NICKEL LMESHFNIc3 1802.86

($1 = 6.2984 Chinese yuan)

(Reporting by Melanie Burton; Editing by Subhranshu Sahu)