Copper prices were little changed on Friday as investors weighed weak US jobs data and growing metal supplies versus speculation the European Central Bank's move to cut interest rates would help spur an economic revival in Europe. Benchmark copper on the London Metal Exchange (LME) was up just 0.04 percent at $6932.50 a tonne at 1311 GMT. The metal used in power and construction was set for a weekly decline of 0.7 percent, its fifth weekly fall in six weeks.
Data out earlier showed US nonfarm payrolls added 142,000 jobs last month, the smallest increase in eight months and giving a cautious Federal Reserve more reasons to wait a bit longer before raising interest rates. Economists had expected payrolls to increase by 225,000 in August. On the plus side, the European Central Bank cut interest rates to a record low on Thursday and launched a new scheme to push money into the flagging euro zone economy, surprising markets.
"Copper demand has been lacklustre, and this was mainly due to the weak economic data out of Europe, China and Japan," Naeem Aslam, chief market analyst at Ava Trade, said. "However, given the recent announcements by (ECB president Mario) Draghi, I am optimistic that this should stimulate demand for industrial metals such as copper." Europe as a whole accounts for around 20 percent of the world's copper demand, the second-largest copper consuming region after China.
The copper market is expected to be in a 226,000 tonne surplus by the end of 2014, rising to 285,000 tonnes in 2015, a Reuters poll in July showed. Nickel prices edged to a new seven-week high at $19,519 a tonne on worries over worsening ore shortages after a Philippine senator this week proposed banning exports to add more value in country. There was little clarity, however, over how likely the proposal was to pass or on any potential timescale.
Nickel later pared gains to trade up 0.21 percent at $19,435 a tonne. Indonesia enforced a similar policy in January to build up domestic processing at home, choking supply to China's stainless steel producers, which account for more than half of world output.
China's Tsingshan Group expects to start production at its Indonesian nickel pig iron smelter as soon as January, becoming the second plant to ramp up since the new mineral processing laws came into force at the start of the year. In other metals, LME aluminium traded down 0.31 percent at $2,098.50 per tonne, though it was still in site of last week's top of $2,119.50, the highest since February last year. Two Japanese aluminium buyers have agreed to pay a producer a record premium of $420 per tonne for metal to be shipped in the October-December quarter, two sources directly involved in the quarterly pricing talks said on Friday. Zinc, untraded in rings, was bid at $2,295 per tonne, almost flat from Thursday's close.
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