Copper hit a two-week low on Thursday after jobless claims suggested further improvement in the US jobs market, increasing the chances of a Fed rate rise later this year and so boosting the dollar. Benchmark copper on the London Metal Exchange ended at $4,758 a tonne, down 0.9 percent, having earlier touched $4,750, the lowest since September 20. Traders said volumes were subdued by a week-long holiday in China.
A stronger US currency makes dollar-denominated commodities more expensive for non-US firms - a relationship used by funds to generate buy and sell signals for short-term trading. The number of people filing for unemployment benefits in the United States fell unexpectedly last week to near a 43-year low. But much will depend on US non-farm payrolls on Friday, seen as a critical gauge of the economy's health.
"Tomorrow is the big day ... if we see positive data we could see the dollar strengthen further," said Sergey Raevskiy, analyst at investment bank SP Angel. But analysts still expect China to be the main driver for copper over coming months. China accounts for about half of global consumption estimated at around 22 million tonnes this year.
Aluminium ended up 0.1 percent at $1,677 a tonne and zinc settled one percent lower at $2,320. Lead ended 0.5 percent higher at $2,054.50. "Zinc and nickel to a lesser extent appear most supply constrained with expected deficits in the next two years," said Koen Straetmans, senior strategist at NN Investment Partners.
"Aluminium, in contrast, appears to remain structurally oversupplied over the next years." Nickel ended 1.7 percent higher at $10,255 a tonne, but it has fallen more than 3 percent this week on receding worries over supplies from the Philippines and expectations of higher supplies from Indonesia.
The Philippines said on Friday that it might not halt operations at all 20 mines facing suspension for environmental violations and will give them time to address problems, a softening of the stance that has resulted in 10 mine closures. Tin finished 1 percent higher at $20,095 a tonne on worries about shortages on the LME market, where two companies hold large amounts of warrants and cash contracts. Those positions were the reason for Wednesday's premium of nearly $90 a tonne for the cash contract over three-month tin.
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