METALS-ShFE copper hits 4-month high, LME firm after jobs data

* Metals up 1.6 percent on average in London and Shanghai

* ShFE copper highest since April, LME toys with 4-mth peak

* Jobs number underpins mood; copper, tin favoured

* Tin flag signals technical break out

* Coming Up: Euro zone Sentix index for September; 0830
GMT
(Updates prices, adds technical outlook for tin, graphic)

By Nick Trevethan

SINGAPORE, Sept 6 (Reuters) - Copper prices rose more than
1 percent Monday, with London flirting with the four-month high
struck in the previous session after stronger-than-expected
U.S. jobs data last week.

Three-month LME copper CMCU3 rose $80 to $7,720 a tonne
by 0706 GMT, and earlier touched $7,732.75. On Friday, copper
hit a session peak of $7,750, its highest since late April in
response to better-than-expected U.S. payrolls data.

"Business confidence is the biggest uncertainty that the
economy is struggling with. U.S. data has been rather mixed
recently, but the payrolls data has soothed fears of a double
dip," Barclays Capital analyst Yingxi Yu said.

U.S. non-farm payrolls fell 54,000 in August, much less
severe than the 100,000 job losses analysts had forecast.
Losses in June and July were also revised down. [ID:nN02227856]

Yu added: "Within metals, we are seeing increasing
divergence. Copper and tin... are performing better than their
peers. With fewer macro fears as we emerge from the early
recovery phase, we will see fundamentals playing a more
important role."

Inventory trends also remain supportive. Copper inventories
in warehouses monitored by the Shanghai Futures Exchange fell 4
percent from a week earlier. [ID:nTST000404]

Benchmark third-month Shanghai copper SCFc3 rose 650 yuan
to 60,530 yuan by the close, it highest since the end of April.

LME stocks fell 1,800 tonnes on Friday to 397,675 to their
lowest since November last year when prices were around $1,200
lower than current values. When copper hit its record high of
$8,940 in July 2008, stocks stood at around 120,000 tonnes.

"Copper is now less than 15 percent off the record and
there people out there drooling to see prices break it," a
trader in Hong Kong said.

Next month the great and the good in the metals world
gather in London for the annual LME Dinner, when miners,
smelters and consumers get together to thrash out supply deals
for the following year in what is termed the "mating season".
"In the very near term, that might be difficult, but towards
the end of this month and the start of the mating season in
October, sparks could fly," the trader added.

The week of the event is frequently a nexus of volatility
as prevailing sentiment crystalises on one side of the market
or the other to send prices soaring or sliding.

The mood in 2008 was especially depressed, triggering a
string of falls that saw copper slide $2,000 in two months from
$8,200 in mid-October. The mood last year was more positive
with a rally from below $6,000 in October that peaked at around
$7,800 in early January.

Tin CMSN3 rose 1.3 percent to $21,475. Worries about
supply from top exporter, Indonesia and declining inventories
have pushed ton prices up 27 percent this year, making it the
top performer in the LME complex. Like copper, tin is around 15
percent off its all-time high struck in May 2008.

The tin market may be steeling itself for a breakout based
on technical formation. A pennant formation has developed in
the past week or so, suggesting a break from the recent $20,400
to $21,750 range. A break to the upside would push tin to a new
two-year peak and possibly a lifetime high.

For a graphic showing pennants in tin, click:
here
g In other metals, LME zinc CMZN3 rallied 2.2 percent,
while
Shanghai metal SZNc3 gained 2.7 percent. LME zinc has risen
12 percent in the past seven sessions, its strongest
performance since mid-June.

Traders noted buyers had returned to the futures market in
a big way in the past two weeks as producers and merchants held
back physical sales in China on hopes of higher prices, given
the threat of supply disruption from maintenance outages.
Base metals prices at 0706 GMT
Metal Last Change Pct Move End 2009 YTD pct
chg
LME Cu 7720.00 80.00 +1.05 7375.00
4.68
SHFE Cu* 60530.00 650.00 +1.09 59900.00
1.05
LME Alum 2183.00 35.00 +1.63 2230.00
-2.11
SHFE Alum* 15695.00 125.00 +0.80 17160.00
-8.54
COMEX Cu** 351.75 2.40 +0.69 332.75
5.71
LME Zinc 2199.00 47.00 +2.18 2560.00
-14.10
SHFE Zinc 18090.00 470.00 +2.67 21195.00
-14.65
LME Nickel 22250.00 650.00 +3.01 18525.00
20.11
LME Lead 2207.00 39.00 +1.80 2432.00
-9.25
LME Tin 21475.00 275.00 +1.30 16950.00
26.70
LME/Shanghai arb^ 770
Dollar/yuan 6.7867 \ 6.7873
** 1st contract month for COMEX copper
* 3rd contact month for SHFE aluminium, copper and zinc
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE
third month
(Editing by Ed Lane)