MARKETS-METALS (UPDATE 5)
* U.S. non-farm payrolls unexpectedly fall in September
* Dollar volatile, euro erases gains after Juncker comments
* Analysts predict action from Fed to boost economy
(Recasts, updates prices and comments)
By Marie-Louise Gumuchian and Humeyra Pamuk
LONDON, Oct 8 (Reuters) - Copper rose 1 percent on Friday after U.S. jobs data showed a surprise fall in September, deepening expectations that more quantitative easing could be on the way to boost the world's biggest economy.
Benchmark copper jumped to a session high at $8,194.50 a tonne and was at $8,163.50 a tonne by 1316 GMT, up from $8,100 a tonne on Thursday. The metal, widely used in construction, touched $8,326 on Wednesday, its highest since July 2008.
"Payrolls weren't great numbers but they weren't too shabby either," said analyst David Thurtell at Citi. "Private payrolls rose by 64,000 and last month's numbers were revised up."
The U.S. economy unexpectedly shed jobs in September for a fourth straight month as government payrolls fell. Nonfarm payrolls dropped 95,000, against a market expectation of payrolls remaining unchanged.
Speculation about the U.S. Federal Reserve stepping in with more quantitative easing to bring life to the economy has been fuelling metal prices as it bolsters the demand outlook while hitting the dollar.
"It's definitely a strong possibility that Fed will do something to assist, to ease further," Thurtell said. "But if you look at world industrial production, it's now above where it was prior to the crisis -- hence the high copper price."
Copper gave up some of its initial advance after the chairman of euro zone finance ministers, Jean-Claude Juncker, said the euro was too strong against the dollar at $1.4, causing the single currency to erase its gains.
Copper has risen more than 30 percent since hitting an eight-month low in June, at the forefront of a rise in metals prices that saw tin hit a record high this week.
TIGHT SUPPLIES
Copper is also benefiting from a tightening market, where stocks in LME warehouses have tumbled more than 30 percent since the middle of February.
Friday's data showed LME stocks down 1,450 tonnes to 372,000 tonnes, having fallen from seven-year highs above 555,000 in late February.
Talk of launching physically backed exchange-traded copper products (ETPs) looks to be a cause of unease as consumers think it could reduce the availability of the metal.
The supply side worries, along with an uncertain demand outlook as well as the sustainability of high metal prices, will be at the heart of this year's LME Week, the annual gathering of mining industry in London, due next week.
Among other metals, tin traded at $26,000 a tonne versus Thursday's close of $25,600, short of Wednesday's record peak at $26,790, underpinned by tight supply from top exporter Indonesia and low stocks.
Stainless steel material nickel traded at $24,047 a tonne from Thursday's close of $23,900, while battery material lead was at $2,243 a tonne versus $2,209.
Lead inventories slipped 900 tonnes but remain near 10-year highs at around 198,400 tonnes.
Zinc traded at $2,275 a tonne versus $2,261 a tonne while aluminium traded at $2,366.50 a tonne versus Thursday's close of $2,326 a tonne.
"Aluminium is finally catching up with copper," said one LME trader, adding that prices had failed to match copper's rise in recent days.
Metal Prices at 1315 GMT Metal Last Change Percent Move End 2009 Ytd Percent
move LME Alum 2349.00 23.00 +0.99 2230.00 5.34 LME Cu 8114.00 14.00 +0.17 7375.00 10.02 LME Lead 2224.00 15.00 +0.68 2432.00 -8.55 LME Nickel 23750.00 -150.00 -0.63 18525.00 28.21 LME Tin 26000.00 400.00 +1.56 16950.00 53.39 LME Zinc 2260.00 -1.00 -0.04 2560.00 -11.72 SHFE Alu 15975.00 105.00 +0.66 17160.00 -6.91 SHFE Cu* 60610.00 10.00 +0.02 59900.00 1.19 SHFE Zin 17930.00 55.00 +0.31 21195.00 -15.40 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
