* China copper premiums drop $5 after large warehouse deliveries
* Copper investors trim long positions - CFTC
* Indonesia minerals export ban regulation expected this week
* Coming Up: Germany Industrial Output for Nov at 0900 GMT (Adds comment, detail, updates prices)
By Melanie Burton
SYDNEY, Jan 9 (Reuters) - London copper rose slightly on Monday, hovering below a two-week high hit last week, after a solid U.S. jobs report lifted the dollar, making commodities more expensive for holders of other currencies.
Market activity was subdued as many Western traders were still away on holiday.
Broker Jefferies hiked copper price forecast for 2017 to 2.75 per pound from 2.38 per pound, a surge of more than 15 percent, as it now sees a deficit for this year due to less spending by miners.
“Copper is our preferred commodity for 2017... We now forecast a small (82,000 tonne) copper market deficit this year due to lower supply projections,” it said in a report.
“Copper mining companies slashed capex, and in some cases, high-graded mines during the downturn. Operating risk has increased as a result, and unexpected disruptions are likely to be a prominent factor in the copper market this year.”
Three-month copper on the London Metal Exchange was up 0.4 percent at $5,614.50 a tonne by 0730 GMT, after closing little changed from the previous session. Prices hit the highest in more than two weeks at $5,698 a tonne last Thursday.
Shanghai Futures Exchange copper climbed 0.7 percent to 45,730 yuan ($6,599) a tonne.
Disruptions could come as soon as this week with a ban on ore exports from Indonesia set to come into effect, although miner Freeport is in talks with the government to continue exports as it constructs a new smelter.
Hedge funds and money managers reduced their net long positions in copper, U.S. Commodity Futures Trading Commission (CFTC) data showed.
China copper premiums have come under pressure after large inflows into warehouses as traders delivered metal to tidy books at year-end.
Weekly Shanghai copper stocks jumped 17 percent last week. Premiums for copper in China bond dropped $5 on Friday. <0#BASEBW-SHMET>
In wider markets, U.S. employment increased less than expected in December but a rebound in wages pointed to sustained job market momentum that sets up the economy for stronger growth and further interest rate increases from the Federal Reserve this year.
Japanese markets were closed on Monday for a public holiday, exacerbating quiet trade after the New Year’s break, with traders reluctant to take on large positions given an early Lunar New Year for 2017 that starts at the end of January.
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 = 6.9300 Chinese yuan Reporting by Melanie Burton; Editing by Randy Fabi and Sherry Jacob-Phillips