June 6, 2016 / 2:13 AM / in 4 years

METALS-London copper hits four-week high as dollar stumbles

(Adds detail, updates prices)

* With light China demand, ample supply, copper to range trade

* Speculators trim short copper position in latest week - CFTC

* Coming Up: EZ Sentix index at 0830 GMT

By Melanie Burton

MELBOURNE, June 6 (Reuters) - London copper climbed on Monday to its highest in four weeks after a shock miss in May’s U.S. jobs data pushed back expectations for a rate rise this month and pummelled the dollar.

The U.S. economy created the fewest number of jobs in more than 5-1/2-years in May, which could make it harder for the Federal Reserve to raise interest rates.

As a result, the dollar languished at its lowest in over three weeks in early trade, boosting the buying power for commodities of consumers paying with other currencies.

“The jobless numbers of Friday certainly have caught market participants by surprise, in general, hence the move in the dollar which has supported the commodity complex pretty much across the board,” said analyst Mark Keenan of Societe Generale in Singapore.

“So that raises some questions about what happens on the mid-June meeting ...(given) commodities respond positively to a weaker dollar these days.”

A speech by Federal Reserve chief Janet Yellen on Monday evening will be watched very closely for any signs that the Fed is backing away from its recent campaign to prepare the market for another hike in the next meeting or two, noted ANZ.

Three-month copper on the London Metal Exchange advanced by 0.8 percent to $4,726 a tonne by 0703 GMT, having earlier touched $4,748 which was the strongest since May 12. Prices rose 1.7 percent on Friday.

“Outside of the Friday shocker, we should note that the U.S economy is in fairly good shape, and if anything, seems to be getting stronger,” said INTL FC Stone.

“In the absence of cutbacks (partly because most miners are still profitable) and questions about ‘real’ Chinese demand, we think prices will likely remain range-bound over the course of June and see a $4,500-$4,850 band in place.”

INTL FC Stone said most of China’s huge Jan-April copper imports were currency rather than demand related.

Shanghai Futures Exchange copper traded up 2.4 percent at 36,260 yuan ($5,524) a tonne.

A flurry of data from China in coming weeks is expected to reinforce views that the world’s second-largest economy is slowly steadying but not gaining momentum, a Reuters’ poll showed.

The United States supports China’s efforts to cut excess industrial capacity and encourages its use of fiscal and lending policies to strengthen consumer demand as part of its economic transition, U.S. Treasury Secretary Jack Lew said.

Copper production in Democratic Republic of Congo, Africa’s top miner of the metal, dropped 20 percent in the first quarter.

Hedge funds and money managers trimmed their net short position in COMEX copper contracts in the week to May 31, regulatory data showed.

In other metals, Shfe zinc and ShFE nickel rallied more than 2 percent at one stage, pulled up by solid gains in end-use sector steel.

But high prices are weighing on physical zinc demand in China, where premiums have dropped to $115 for bonded material from $135 in late May. ZN-BMPBW-SHMET


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

Most active ShFE nickel

Three month LME tin

Most active ShFE tin ($1 = 6.5643 Chinese yuan) (Reporting by Melanie Burton; Editing by Ed Davies and Biju Dwarakanath)

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