LONDON (Reuters) - Copper steadied on Thursday following a 3 percent loss the day before, helped by consumer buying and improved appetite for risk, but any gains were limited by a stronger dollar and ahead of the long Easter weekend in U.S. and European markets.
Three-month copper on the London Metal Exchange was $8,379 a metric ton at 9:28 a.m. EDT (1328 GMT) against a close of $8,350 a metric ton on Wednesday.
A government report showed the number of Americans lining up for new jobless benefits fell to the lowest in nearly four years last week. This boosted the dollar, as the euro fell, offsetting gains base metals would have made due to the jobless figures.
A stronger dollar makes U.S. priced commodities like copper and aluminum more expensive for holders of other currencies.
Copper this week rallied to within 1 percent of 2012 peaks above $8,700 a metric ton on anticipation of more monetary easing in the United States. But minutes from a U.S. monetary policy meeting on Tuesday quashed those expectations and led to a divestment of risk across markets.
Prices have been caught in a range since late January, when they reached $8,200 a metric ton on consumer buying and capped by producer selling at around $8,600, Cit analyst David Wilson said.
"Each time copper dips we see consumer hedging and some buying from investors. But as prices get to about $8,600, you're getting some of the small producers selling. Funds have no conviction either way, so it seems to be stuck in this range for now," he said.
Market attention will now turn to U.S. non-farm payrolls on Friday, and trade data from top copper consumer China, which will shed light on consumption in a country that accounts for 40 percent of world copper demand.
Both figures are due before London reopens on Tuesday after the 4-day Easter holiday weekend.
The U.S. non farm payrolls report is expected to show a fourth month of solid job growth in the United States in March, according to economists polled by Reuters.
"With our house view for U.S. employment data to come in above consensus, we could see room for potential upside in copper prices in the coming days," ANZ said in a research note.
Elsewhere, European shares eked out modest gains on Thursday with investors looking for bargains after three weeks of losses, but sentiment remained fragile after lower demand at a Spanish auction rekindled funding concerns for weaker euro zone countries.
Chinese trade data early on Tuesday is expected to show consistently high copper imports as metal is used as collateral to secure cheaper financing in the credit-strapped country. ECONCN
China's arrivals of refined copper are expected to have risen in March after February's higher-than-expected figure as importers scheduled more term shipments under 2012 contracts on expectations of peak domestic demand, traders said last month.
"You're probably going to find the import number is reasonable, given the Chinese are buying for financing reasons. It's just got nothing to do with consumption," Citi's Wilson added.
Import figures, which used to be seen as a barometer for demand, have become muddied over the past year because up to 80 percent of imports are used for financing deals.
Given still paltry domestic demand, traders are also interested in the volume of exports, which may have jumped in March as local smelters and traders took advantage of higher international prices to sell their plentiful stocks abroad.
Consistent with the re-export of metal from China, copper stocks in warehouses monitored by the LME rose by more than 5,000 metric ton, data showed on Thursday, with shipments registered in Singapore and Busan.
Across other metals, tin was $22,550 from $22,600, while zinc was $1,984 from $1,982 in line with Wednesday's close.
Battery material lead was $2,002 from $2,012.50, and aluminum was $2,091 from $2,093, earlier hitting a new low since Jan 9. at $2,085 a tonne.
Nickel was at $17,925 from $17,855.
Metal Prices at 1323 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2011 Ytd Pct
COMEX Cu 380.25 1.20 +0.32 344.75 10.30
LME Alum 2091.00 -2.00 -0.10 2020.00 3.51
LME Cu 8373.50 23.50 +0.28 7600.00 10.18
LME Lead 2004.00 -8.50 -0.42 2034.00 -1.47
LME Nickel 17961.00 106.00 +0.59 18650.00 -3.69
LME Tin 22510.00 -90.00 -0.40 19200.00 17.24
LME Zinc 1985.50 3.50 +0.18 1845.00 7.62
SHFE Alu 16070.00 -95.00 -0.59 15845.00 1.42
SHFE Cu* 59910.00 -100.00 -0.17 55360.00 8.22
SHFE Zin 15395.00 -50.00 -0.32 14795.00 4.06 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
Additional reporting by Susan Thomas