December 5, 2014 / 10:21 AM / 6 years ago

METALS-Copper dips after dollar rallies on U.S. payroll data

* U.S. payrolls see biggest jump in nearly three years

* Dollar trades at multi-year peaks

* Copper eyes biggest weekly rise since late Aug (Updates with closing prices)

By Harpreet Bhal and Eric Onstad

LONDON, Dec 5 (Reuters) - Copper and other base metals fell on Friday, pressured by a buoyant dollar and concern about a possible early hike in U.S. interest rates following upbeat U.S. jobs data.

U.S. employers added the largest number of workers in nearly three years in November and wage gains picked up, a sign of economic strength that could draw the Federal Reserve closer to raising interest rates.

“The dollar strengthened sharply as a result, helping to weigh on metal prices in the immediate aftermath of the data,” said Standard Bank analyst Leon Westgate in a note.

A strong dollar makes commodities priced in the U.S. unit more expensive for holders of other currencies.

Three-month copper on the London Metal Exchange (LME) closed 0.2 percent weaker at $6,450 a tonne, after adding more than 1 percent on Thursday, close to a one-week high.

Copper added about 1.5 percent for the week, the biggest weekly gain since late August.

Nickel closed down 1.8 percent at $16,825 a tonne, giving up gains after earlier climbing to its highest in more than two months at $17,200.

Nickel prices have risen about 21 percent since the beginning of the year, following top producer Indonesia’s decision to ban the export of unprocessed ore, and were set to notch up a weekly gain of more than 3 percent.

Stainless steel mills use nickel laterite ore to make nickel pig iron (NPI), a cheap alternative to refined nickel in their feed. But dwindling stocks of ore have raised prospects that the country’s stainless steel sector will have to turn to refined nickel instead.

“High-grade nickel ore prices in China have been moving up slowly over the past two weeks ... at some Chinese ports, traders are hoarding high-grade ore,” said analyst Judy Zhu of Standard Chartered in Shanghai.

Also supporting prices, China’s biggest stainless steel mill TISCO hiked NPI prices by 25 percent this month from November, partly due to tight supply after Beijing ordered plants to shut temporarily as it sought to reduce air pollution ahead of an international conference in October.

Among other metals, aluminium ended down 0.6 percent at $1,982 a tonne, zinc closed unchanged at $2,237, lead dipped 0.1 percent to $2,038 and tin shed 1 percent to finish at $20,200.


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

Three month LME tin (Additional reporting by Melanie Burton in Sydney and Jan Harvey in London, editing by David Evans and Susan Thomas)

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