LME copper price fall slows, but still down

LONDON, Jan 5 (Reuters) - The fall in copper prices slowed on Friday after three torrid days at the London Metal Exchange during which worries about lower demand slashed 10 percent from the industrial metal.

Copper for delivery in three months was quoted at $5,725/5,740 per tonne at 1102 GMT, down $5 from Thursday's kerb close.

At around $5,700, copper is 35 percent cheaper than its peak of $8,800 in May last year, but still more than double its price of three years ago.

Some analysts said users of copper in China, the biggest consumer of the metal, would be looking to pick up metal after the dramatic price drop.

Other market sources said Chinese consumers would remain cautious, expecting further falls in metals prices.

"Chinese fabricators are not willing to buy large volumes of copper," said Zhou Yixing, a senior trader with Jiangsu Suwu Futures, which is located in one of China's copper processing bases.

Copper's fall has come against a background of worry about slowing growth prospects and rising supply of many industrial commodities.

"I am a trend-follower and I am very happy to be so in markets like this. I would hate to have to try and work out the fundamental outlook for these things," a U.S. fund manager said.

"People need a clearer picture. The employment numbers are due later and traders tell me they are not going to touch anything until then."

U.S. non-farm payrolls data for December is due at 1330 GMT, with analysts predicting a rise of 100,000 jobs .

"Copper prices have been falling since mid-December as sentiment deteriorated against rising LME inventories and a perception of slowing demand, especially in the USA," said Peter Richardson, chief metals economist at Deutsche Bank.

Stocks in LME-registered warehouses have risen by more than 12,000 tonnes this week. Another 1,700 tonnes entered storage on Friday, taking the total to 194,875, the highest since March 2004.

Stocks in Shanghai Exchange warehouses fell 257 tonnes in the week ending Thursday to 31,043 tonnes.

Nickel stocks fell 150 tonnes in London on Friday to 6,084 tonnes, just over 1.5 days of global consumption, while the premium for cash metal, or backwardation, flared to $900/1,100 a tonne, from $700 at the end of 2006.

Aluminium was down $36 at $2,664/2,668 and zinc was down $75 at $4,010/4,025.

Mining stocks Xstrata and Rio Tinto were slightly higher by late morning in London, in contrast to the FTSE 100 index which was a touch lower.