MARKETS-METALS (UPDATE 3) * Cash premium over 3-mo copper eases as copper delivered in * Upbeat European data underpin demand expectations * COMING UP: U.S. Non-farm payrolls for November at 1330 GMT (Adds comment/details, pvs SINGAPORE) By Melanie Burton LONDON, Dec 3 (Reuters) - Copper edged up on Friday renewing a push towards record highs on easing worries over the euro zone debt crisis and expectations of improving U.S. demand, as focus shifted to a U.S jobs report later. Benchmark copper on the LME traded at $8,728 at 1116 GMT, up $8 from Thursday's $8,720 close. The metal, used in power and construction, is on track to post its biggest weekly gain since July and stands less than 3 percent from record highs of $8,966 a tonne hit on Nov 11. Given improving signs of recovery in the U.S. as well as Europe, an upbeat labour report is mostly priced in to the market, and the market is more at risk of volatility if the report underwhelms, said Bank of America-Merrill Lynch analyst Michael Widmer. "You still have healthy growth next year in Europe the U.S. and China...slower than this year but still healthy," he said. "The base case right now is that the (jobs figures) come in good, so right now the risk is that you have a surprise to the downside - which would raise the risk of volatility especially after the price rises we have had for the past few days." November's non-farm payrolls figures are due at 1330 GMT. Economists polled by Reuters estimated that U.S. employers added 140,000 jobs in November after adding 151,000 jobs in October. The unemployment rate is expected to remain unchanged from October at 9.6 percent. Earlier, upbeat economic reports out of the Euro zone also underpinned an improving outlook for industrial metals demand. Euro zone retail sales increased more than expected in October, while data showed the euro zone's service sector economy also pulled ahead in November. On the supply side, a strike at a top copper mine, while inventories in general decline, could underpin prices next week - if the strike continues, said investment bank Fairfax. "Falling inventories and the continued strike at the Collahuasi mine in Chile, may push prices up further next week," it said. Chile's giant Collahuasi mine and its workers are close to a deal to end a month-long strike at the world's No. 3 copper deposit, and head into talks on Friday aiming to defuse a deadlock over bonuses. COPPER STOCKS BUILD Inventories of four of the six LME metals rose, the most recent exchange data showed, as traders tidy books and deliver metal into LME sheds to reduce cost of holding inventory over the year end. Inventories of copper saw a rare increase, data showed on Friday, as high premiums for nearby settlement dates attracts metal into warehouse. Copper stocks rose by 1,200 tonnes, data showed on Friday, however stockpiles in LME-bonded warehouses have fallen by over one third since February to at 353,625 tonnes and remain close to the lowest levels in over one year. The premium for cash copper over the three-month benchmark has eased to $55 from almost $63.50 on Thursday. A London trader said earlier that tightness may be shifting towards January as contracts are rolled over. "If the cash to threes eases further this afternoon, then I'll stake my hat that the tightness won't flare up again," he said. Other metals remained close to Thursday's finishing prices. LME aluminium was at $2,354 compared with $2,355, while nickel - used mostly by the stainless steel sector - traded at $23,675 as against $23,700 a tonne. Lead, which rallied over six percent on Thursday stood at $2,374, and unchanged while zinc traded at $2,238 a tonne, down from the $2,260 close. Tin, used in electrical solder, was recently seen at $25,500, also unchanged from Thursday. (Reporting by Melanie Burton, editing by Alison Birrane)

Source