RTRS: METALS-Copper falls as US jobs data boosts dollar
* U.S. factory orders also rise in October
* Inventories a reminder of weak fundamentals
By Michael Taylor and Maytaal Angel
LONDON, Dec 4 (Reuters) - Copper prices fell on Friday after touching their best level since September last year, as a much better-than-forecast U.S payrolls number strengthened the dollar at the expense of metals.
Benchmark copper on the London Metal Exchange ended at $7,040 a tonne from $7,080 at the close on Thursday. Used in power and construction, copper hit $7,170 earlier, a level not seen since Sept 23, 2008.
U.S. employers cut a fewer than expected 11,000 jobs in November, the smallest decline since the start of the recession in December 2007, government data showed on Friday, reinforcing optimism for a more rapid economic recovery.
Also boosting copper, the Commerce Department said U.S. factory orders rose 0.6 percent in October. The consensus was for orders to be unchanged.
But the dollar rose following the data, on speculation that the Federal Reserve may soon have to consider raising interest rates. A stronger dollar makes dollar-priced metals more expensive for non-U.S. investors.
"The dollar is influential on metals prices on a short-term trading perspective," said John Meyer, analyst at Fairfax. But he added: "I think the dollar is outweighed by investment funding and strategic reserve buying. Those numbers ... indicate that some form of recovery is on the way."
A weak U.S. dollar, Chinese buying, improving macro data and new investor cash have stoked industrial metal prices this year.
INVENTORIES CLIMB
But as a sign that fundamentals remain weak, LME inventories climbed 675 tonnes to 446,075 tonnes, the highest since April.
"We are very worried, not only about listed inventories but also about those in China and invisible for the market," said Eugen Weinberg, an analyst at Commerzbank.
Aluminium ended at $2,146 a tonne versus $2,134, having earlier risen to $2,165, within a whisker of the 13-month highs hit on Thursday.
LME stocks for the metal, used in transport and packaging, rose 1,025 tonnes to remain near record highs above 4.5 million tonnes. Most of the stock is tied up in financing deals however, so it has a limited ability to weigh on prices.
Elsewhere, metals analysts downplayed the immediate impact on aluminium prices, after an attack on Guinea's junta leader. The West African country is the world's top export of the aluminium ore bauxite.
Steel-making ingredient nickel ended at $16,000 from $16,005, while battery material lead finished at $2,370 from $2,409.
Zinc ended at $2,368 a tonne from $2,410 and tin was last bid at $15,270 from $15,175.
Metal Prices at 1709 GMT Metal Last Change Percent Move End 2008 Ytd Percent
move COMEX Cu 319.50 -2.45 -0.76 139.50 129.03 LME Alum 2141.00 7.00 +0.33 1535.00 39.48 LME Cu 7050.00 -30.00 -0.42 3060.00 130.39 LME Lead 2355.00 -54.00 -2.24 999.00 135.74 LME Nickel 15950.00 -55.00 -0.34 11700.00 36.32 LME Tin 15175.00 0.00 +0.00 10700.00 41.82 LME Zinc 2365.00 -45.00 -1.87 1208.00 95.78 SHFE Alu 15750.00 -10.00 -0.06 11540.00 36.48 SHFE Cu* 55690.00 10.00 +0.02 23840.00 133.60 SHFE Zin 18525.00 -100.00 -0.54 10120.00 83.05 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
