* BHP Billiton copper production up 6 pct on year * Nickel at near nine-week high * Coming up: U.S. nonfarm payrolls data for Sept at 1230 GMT By Harpreet Bhal LONDON, Oct 22 (Reuters) - Copper steadied on Tuesday in cautious trade as the market awaited the first U.S. jobs report in nearly two months, which is likely to shed light on the pace of recovery in the world's biggest economy. Benchmark copper on the London Metal Exchange fetched $7,251 a tonne at 0935 GMT, up slightly from a close of $7,245 on Monday. Trading is expected to be subdued ahead of U.S. nonfarm payrolls data for September due at 1230 GMT, a release that had been delayed by a partial government shutdown. Economists forecast 180,000 jobs were created last month. A stronger-than-expected payrolls report is likely to reignite debate about when the U.S. Federal Reserve might start tapering its bond-buying programme, which has supported riskier assets such as commodities and shares. "It will certainly take more than one report for the Fed to trigger any kind of unwinding plan. So it is safe to say that the tapering plan may not see daylight till the end of this year or early next year," said Naeem Aslam, chief market analyst at Ava Trade. "Provided that the nonfarm payroll data for the month of August was on the weaker side, the expectations are very much the same for this month, which could keep the dollar on the softer side." A weak dollar makes commodities such as copper, which is priced in the U.S. unit, cheaper for holders of other currencies. Keeping gains in check for copper were concerns about the outlook for demand from top consumer China, as well as expectations of growing supply of the metal used in power and construction. China's refined copper production rose 10.6 percent in September from the previous month, figures from the National Bureau of Statistics showed. "China's copper output increased in September, with smelters raising their operational rates as the weather cooled down, and because TC/RCs (processing fees) were very high," said analyst Chunlan Li of consultancy CRU in Beijing. "Copper production will continue to grow, but it's hard to say if it will grow at the same pace ... Even though concentrate supply is increasing, it takes time for new refinery capacity to ramp up production," she added. Highlighting the outlook for increased supply, BHP Billiton , the world's biggest mining company, said it produced 6 percent more copper in the quarter to end-September than in the year-earlier period. Nickel rose to a near nine-week high at $14,650, helped by a proposed export ban by Indonesia on nickel ore exports. Citi said in a research note that nickel ore producers appeared to be taking seriously prospects of an Indonesian ore export ban from Jan. 12 next year, by raising the metal content in their ore to maximise revenue. "In China it is now believed that ore stocks equivalent to six months of consumption have been built ... as a buffer against a ban," Citi said.

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