LONDON, July 2 (Reuters) - Copper eased on Thursday on a firmer dollar, coming off two-week highs the metal hit in the previous session, and investors looked to key U.S. jobs data to provide further direction.
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Copper surged on Wednesday to $5,187.50 a tonne -- its highest in more than two weeks -- driven by upbeat manufacturing surveys in the United States, Europe and China.
The economic calendar will again be closely watched from 1230 GMT, with U.S. jobs data due ahead of the Independence Day holiday on Friday.
Copper for three month delivery on the London Metal Exchange traded at $5,020 a tonne in rings from $5,090 at the close on Wednesday and compared with a session low at $4,987.50.
"It's the non-farm payrolls," said Robin Bhar, senior metals analyst at Calyon. "That is going to be influential one way or the other, in a sense that people will take tomorrow off (and) markets will be dead."
"It should be an OK number in the sense that this week we've had some constructive data ... there is a sense that the data is getting better but still room for improvement."
The European Central Bank held interest rates at 1 percent as expected, offering little direction for both currencies and industrial metals.
A weaker dollar has helped base metal prices in recent weeks, but the U.S. currency edged up from close to three-week lows on Thursday. A strong U.S. currency makes metals priced in dollars more expensive for holders of other currencies.
Prices of the red metal, used in power and construction, have risen about 60 percent this year, boosted by Chinese stockpiling.
Buying from China appears to be fading, however, and combined with the summer lull, analysts see base metal price weakness in the coming months. Copper stocks will be closely scrutinised. On Thursday they fell 1,500 tonnes to 264,225 tonnes -- the lowest since November.
ALUMINIUM DIPS
Aluminium fell $21 to $1,642 in LME rings. LME inventories of the metal, used in transport and packaging, remain at near record levels of above 4.3 million tonnes.
Aluminium rose about 16 percent in the second quarter, buoyed by Chinese buying and a shortage of the metal in the near term.
But idled smelters re-starting and continued weak economic conditions could hinder prices, analysts said.
"People get carried away with better numbers -- of course they will be better than diabolical (data) we had in the last quarter of last year," said Chris Powell, head of commodities at ETX Capital.
"You are going to see a sideways move over the next two months and then once the sun goes in, people stop spending and realism kicks in, you will see a downward trend."
Steel-making ingredient nickel traded at $16,255 from $16,450 while battery material lead was at $1,729.50 in LME rings from $1,739.
Investors will closely watch developments from BHP Billiton ( BBL - news - people ) Ltd which, for the second time in less than a month, temporarily closed its Perseverance nickel mine in west Australia due to rock falls.
Zinc traded at $1,572 a tonne from $1,595 and tin was last bid at $14,350 from $14,500.
Worries about nearby tin supplies have pushed the premium for cash material over the three-month contract to around $68 a tonne from a discount of around $40 a tonne in mid-June.
Earlier, the LME experienced technical problems with its price updates. Metal Prices at 1211 GMT Metal Last Change Percent Move End 2008 Ytd Percent
move COMEX Cu 227.75 -3.75 -1.62 139.50 63.26 LME Alum 1635.00 -28.00 -1.68 1535.00 6.51 LME Cu 5022.00 -68.00 -1.34 3060.00 64.12 LME Lead 1719.00 -20.00 -1.15 999.00 72.07 LME Nickel 16150.00 -300.00 -1.82 11700.00 38.03 LME Tin 14350.00 -400.00 -2.71 10700.00 34.11 LME Zinc 1565.00 -30.00 -1.88 1208.00 29.55 SHFE Alu 13465.00 45.00 +0.34 11540.00 16.68 SHFE Cu* 40190.00 -150.00 -0.37 23840.00 68.58 SHFE Zin 13400.00 0.00 +0.00 10120.00 32.41 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
