* Copper rebounds as dollar drops a bit
* Nickel mkt focuses on outlook for Indonesia export restrictions (Updates prices)
By James Regan
SYDNEY, Jan 4 (Reuters) - London copper recouped earlier losses in late Asian trading on Wednesday as the U.S. dollar lost some of its steam.
The dollar moved back towards a 14-year peak as U.S. debt yields resumed climbing, making dollar-denominated assets such as copper less expensive for holders of other currencies.
Three-month copper on the London Metal Exchange was 0.5 percent higher at $5,529 a tonne by 0700 GMT, after trading lower for most of the day and finishing Tuesday down 0.6 percent.
The most-traded copper contract on the Shanghai Futures Exchange dropped 1.1 percent to 45,520 yuan ($6,545) a tonne.
Elsewhere, nickel was initially driven to fresh 3-1/2-month lows after big overnight losses in London on expectations Indonesia may ease restrictions on exports of ore soon, filling a gap in supply caused by the closure of nearly a dozen mines in the Philippines for environmental reasons.
The Indonesian Association of Mineral Entrepreneurs has asked the government to allow exports of low-grade nickel ore.
Indonesia has tried to limit exports of metal ores to encourage local mining companies to build their own smelters to process the ore locally. But the government has also made some concessions on this policy after protests from the mining industry.
LME nickel stood at $10,040 a tonne, rebounding from prices last plumbed in September.
Capital Economics commodities analyst Caroline Bain said a forecast deficit in global supplies of nickel this year would bolster prices as the year wore on.
“Our end-2017 forecast for the price of nickel is $12,000 per tonne,” she said in a note.
ShFE nickel was down 1.48 percent 85,130 yuan ($12,240) a tonne.
ShFE aluminium was 0.28 percent lower, while ShFE lead settled 0.11 percent up.
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 = 6.9550 Chinese yuan) (Reporting by James Regan; Editing by Joseph Radford and Subhranshu Sahu)