Copper steadies as traders digest strong US payrolls

Copper steadied on Friday as investors squared positions after a strong US payrolls report, even as they kept an eye on a stronger dollar and tried to gauge to what extent the recovery in China and United States had been priced in. US employment increased by less than expected in December, but a rebound in wages pointed to sustained labour market momentum that sets up the economy for stronger growth and further interest rate increases.
Copper investors had grown cautious after prices rose by 2.6 percent on Wednesday to their highest since December 16. "The rally (last year) got ahead of itself," said Capital Economics' senior commodities economist Caroline Bain. "China will continue to do well over the next couple of months ... (but) optimism over China picking up and (US president-elect Donald) Trump's infrastructure spend are going to fade (by the second quarter)."
Three-month copper on the London Metal Exchange ended up 0.2 percent at $5,590 a tonne. The metal gained 18 percent last year and ended the first week of trade with a gain of 1.2 percent. Chinese data in coming weeks is expected to show that the world's top metals consumer carried solid momentum into 2017, thanks to heavy government stimulus and a construction boom.
But Beijing's decision to double down on spending may have come at a high price, leaving policymakers with their hands full in 2017 trying to defuse financial risks created by the explosive growth in debt. "I think we'll continue to chop sideways until people get more clarity on what Trump really can do to bolster growth and what Chinese policy is going to look like," said ICBC Standard Bank analyst Tom Kendall.
"The market is neutrally positioned and waiting for the next data point, policy announcement or supply upset." Zinc ended flat at $2,619 a tonne, having risen by 3.9 percent on Wednesday. Prices of the metal used to galvanise steel climbed 60 percent last year. Aluminium ended up 0.7 percent at $1,713 a tonne, lead closed up 0.1 percent at $2,055.5, tin ended down 0.3 percent at $21,005 and nickel closed down 0.4 percent at $10,245. Indonesia exported 6,050.82 tonnes of refined tin in December, Trade Ministry data showed, up 4 percent from the same month a year earlier.