London Metal Exchange (LME) copper futures regained strength in Asia on Monday, supported by solid bargain-hunting as the dollar struggled against key currencies following disappointing US jobs data. Underlying sentiment for copper stayed bullish despite steep falls last week as there were few fundamental factors to spur more selling with inventories at LME warehouses declining steadily, traders said.
"Tight supply conditions and a weaker dollar are key factors keeping copper supported," said an LME trader at a Japanese trading house.
"We saw the price drop sharply from highs above $3,100 but copper should find support as long as the dollar is bearish." The three-month LME copper futures contract stood at $3,012/$3,017 per tonne against $3,002 in London on Friday. The key copper contract hit a 1-1/2 month high of $3,143 on November 25, but lost ground last week. In Shanghai, February copper futures fell 10 yuan a tonne to 27,980. The dollar struggled after coming under fresh downward pressure from surprisingly weak US payroll figures on Friday.
The dollar was at around 102.08/13 yen after falling to a low of 101.91 yen in Asian trade. It hit a five-year low of 101.83 on Thursday. The euro was at $1.3438/44, against $1.3454 in New York and a record high of $1.3461 marked on Friday.
The dollar tumbled across the board on Friday after US non-farm payrolls rose 112,000 in November, well below economists' median forecast for a rise of 180,000. The jobless rate was 5.4 percent, matching forecasts.
LME traders said speculators were closely watching the dollar's moves to determine the trend for copper and other metals. "At the moment, price moves in copper are closely linked with the euro/dollar rate," the trader at the trading house said.
Other LME metals were little changed from London levels. Key three-month LME aluminium was at $1,808/$1,812 per tonne against $1,808 in London. The most active February Shanghai aluminium futures rose 90 yuan to 15,700 yuan. Three-month nickel futures on LME were at $13,050/$13,150 per tonne from $12,975 in London. LME tin futures were quoted at $8,800/$8,880 per tonne against $8,820 in London.
LME zinc was at $1,175/$1,180 per tonne against $1,175 on Friday. Lead futures were steady at $953/$958 against $951.50 in London.
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