Copper hit a one-week low on Friday after US data showed employers stepped up hiring in May in a show of economic resilience that suggests the Federal Reserve could begin to scale back monetary stimulus later this year. Three-month copper on the London Metal Exchange ended down 1.41 percent at $7,230 a tonne, having earlier hit a one-week low of $7,221. Copper is down nearly 4 percent so far this quarter, and some 8.5 percent this year.
The United States added 175,000 jobs last month, just above the median forecast in a Reuters poll, Labour Department data showed on Friday. --- Indian copper smelter faces another hurdle in reopening "The jump is quite substantial because the April estimate was also revised (higher). The dollar is taking a toll on copper, but copper is still stuck in a range. Inventories are not ideal, but then we had this (shutdown) at Grasberg," said Andrey Kryuchenkov, analyst at VTB Capital.
The dollar hit a session high versus the euro and even turned briefly positive against the yen after the US payrolls data. A strong dollar makes dollar-priced metals more expensive for European and other non-US investors. Also weighing on copper, data showed copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 1.2 percent from last Friday, climbing for a second consecutive week.
In addition, a Reuters poll showed growth in China investment and factory output probably remained listless in May on soft domestic demand, heightening risks that the economy may cool further in the second quarter. China is the world's top copper consumer, accounting for 40 percent of global copper demand. Its GDP grew by a smaller-than-forecast 7.7 percent in the first quarter.
Supporting copper, operations at the world's No 2 copper mine, Grasberg in Indonesia, remain shut after a deadly accident last month, although a government-led investigation may not take as long as first thought, the head of the probe said on Friday. "Supply disruptions are also playing a part to help prices. But with a soft demand side in China, prices aren't going to lift dramatically," said economist Alexandra Knight of National Australia Bank in Melbourne. Meanwhile India's top copper smelter could face delay in reopening from a two-month shutdown after a local authority lodged an appeal. A major China copper producer has also partially suspended operations for a month after a breakdown.