* U.S. Nov factory activity hits 2-1/2 year high
* Dollar rises, euro zone manufacturing remains weak overall
* Chinese manufacturing maintains steady growth
By Maytaal Angel and Eric Onstad
LONDON, Dec 2 Copper extended last month's
losses on Monday as upbeat U.S. economic data spurred renewed
fears about the Federal Reserve
trimming monetary stimulus and the dollar strengthened.
Three-month copper on the London Metal Exchange
closed down 1.1 percent at $6,975 a tonne after gaining half a
percent in the previous session.
"It's the dollar, which is firmer now, and probably renewed
caution about when the Fed is going to taper," Frankfurt-based
Commerzbank analyst Daniel Briesemann said.
Data showed U.S. factory activity at its highest for two and
a half years in November and construction spending increased
solidly in October, brightening the economic outlook.
A stronger U.S. economy makes it more likely the Federal
Reserve will start paring its commodity-friendly stimulus sooner
rather than later, restricting access to funds for business and
The dollar index rose about 0.2 percent, making
dollar-priced metals more expensive for non-U.S. investors.
A weekly report by the U.S. Commodity Futures Trading
Commission on positioning in Comex copper is due later on
Monday, delayed from Friday because of the Thanksgiving holiday.
"There has been a massive build up in short positions in the
past few weeks and I wouldn't be surprised to see this trend
continue, and that's continuing to weigh on prices," Briesemann
"But this could also prove to be a springboard for prices
when the mood of market players changes and they have to cover
their short positions."
Copper failed to gain support from data showing China's
factory activity maintained steady growth momentum in November.
"The China data was expected, copper remains range-bound. No
one wants to do anything. We know there's going to be a surplus
even if it's debatable how big," VTB Capital analyst Andrey
Copper recorded its biggest monthly loss since June last
month, dogged by expectations that growing mine production would
widen a market surplus into next year. But in the near term, a
shortfall in refined metal and steady demand from China have put
a floor under prices.
Daily LME data showed copper stocks fell by
3,425 tonnes to 420,400 tonnes, their lowest point since
mid-February. Stocks have been falling consistently since June.
Among other metals, consumer interest in aluminium has
failed to pick up despite prices at four-year lows, broker
Triland Metals said in a note.
"General sentiment among this group seems to be that ...
they will pick up metal at lower prices in coming weeks."
Aluminium failed to trade in closing open outcry
activity, but was last bid down 0.74 percent at $1,742 a tonne
after touching a low of $1,736.25, the weakest since July 2009.
Nickel, the biggest loser of the base metals complex in
November and down more than 20 percent this year, could be set
for a rebound, given a looming Indonesian ban on raw materials
exports, Barclays Capital said.
"The potential Indonesian ore export ban, which is slated to
come into force in just six weeks, is a significant supply risk
that should be lending some support to prices," it said.
Nickel closed barely changed, down 0.04 percent at
$13,515 a tonne.
Zinc finished down 0.1 percent at $1,875 a tonne,
lead fell 0.63 percent to $2,067 a tonne and tin
slipped 1.3 percent to close at $22,500 a tonne.
Indonesia's tin exports picked up in November to around two
thirds of typical levels, Reuters analysis of exchange data
showed, recovering from a two-month slump triggered by a change
in the country's export rules.
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