Copper rises as stocks erode, but down on month
* Jobs, inflation data point to recovery in Europe
* Copper stocks continue to decline on the LME and ShFE
* Rio Tinto to stop output at Australian alumina refinery
Copper ticked higher on Friday, supported by a weaker dollar and falls in stockpiles, but still posted its biggest monthly loss since June on expectations of growing supply and tepid demand going forward.
Benchmark three-month copper on the London Metal Exchange closed 0.5 percent higher at $7,055 a tonne. Copper has rebounded from a three-month low of $6,910 hit last week, but prices have given up 2.7 percent this month.
A weaker dollar supported metals markets, making dollar-priced metal cheaper for non-U.S. investors.
Investors were also encouraged by the first fall in euro zone unemployment in almost four years, coupled with rising prices, which gave fresh momentum to an economic recovery in the region.
Also helping copper, daily data showed stockpiles on the London Metal Exchange fell to 423,825 tonnes, their lowest point since mid-February this year. In addition, copper stocks held by the Shanghai Futures Exchange fell 2.1 percent from last Friday.
"You have these low and rapidly falling visible stocks causing tightness along the curve, but I don't believe this decline is representative of the underlying market," BNP Paribas analyst Stephen Briggs said.
"We are in a bear market. I think we'll have a smallish surplus this year and slightly bigger one next year. There's more downside over the next nine months, but in the shorter term there's clear tightness of one kind or another."
In an indication that copper stocks leaving LME and ShFE warehouses have not all been consumed, Macquarie said an analysis of trade data showed Vietnam had imported about 250,000 tonnes of copper this year, roughly triple its needs and equivalent to this year's global surplus.
Vietnam is not approved as an LME delivery point, so stocks have not been visible in LME reports.
Also weighing on the demand outlook, a Reuters poll showed manufacturing activity in top copper consumer China probably grew at a slower pace in November as demand weakened as Beijing shifts its focus to market-based reforms.
China will release official manufacturing figures on Monday.
Chile, the world's No. 1 copper producer, turned out 507,694 tonnes of copper in October, a 6.5 percent increase from the year before, the government said on Friday.
The best performer of LME metals on Friday was tin, which many analysts peg as having the best supply-demand fundamentals. Tin closed 1.2 percent higher at $22,800.
The market deficit in the global tin market is expected to deepen in 2014 to 12,400 tonnes from 7,400 tonnes this year largely from improved demand from a recovering electronics sector, industry group ITRI said.
Aluminium ended barely changed, up 0.1 percent at $1,755 a tonne, having hit a four-year low at $1,744 a tonne this week.
Reflecting a tough market for aluminium prices, which have been dogged by a global surplus, miner Rio Tinto said it would stop alumina production at its Gove refinery in Australia because the plant was no longer viable.
Nickel finished up 0.9 percent at $13,520 a tonne, but posted a loss of 7.5 percent for the month as global stocks swell to record highs amid declining use from stainless steel makers.
In industry news, the parent company of Finnish nickel miner Talvivaara has started a court-supervised restructuring, the miner said on Friday, in an attempt to avoid bankruptcy.
Zinc closed up 1 percent at $1,877 a tonne, and lead gained 0.7 percent at $2,080 a tonne.
Three month LME copper CMCU3
Most active ShFE copper SCFcv1
Three month LME aluminium CMAL3
Most active ShFE aluminium SAFcv1
Three month LME zinc CMZN3
Most active ShFE zinc SZNcv1
Three month LME lead CMPB3
Most active ShFE lead SPBcv1
Three month LME nickel CMNI3
Three month LME tin CMSN3