METALS-Copper edges higher as US rate outlook, shutdown talks in focus

SHANGHAI, Nov 12 (Reuters) - Copper edged higher on Wednesday after stronger U.S. private-sector labour data lifted expectations of a Federal Reserve rate cut, while investors awaited progress toward resolving the prolonged U.S. government shutdown.

The most-active copper contract on the Shanghai Futures Exchange SCFcv1 closed daytime trading up 0.16% at 86,840 yuan ($12,191.49) a metric ton.

The benchmark three-month copper CMCU3 also posted minimal movement, inching 0.06% higher to $10,833.5 a ton, as of 0705 GMT.

Payroll processor ADP said on Tuesday that firms in the United States shed more than 11,000 jobs in the week through late October, though it reported last week that 42,000 jobs were added in the full month of October.

The ADP report, which serves as an alternative to official labor data, unavailable due to the U.S. government shutdown, added to recent signs of softening labor conditions.

Some Fed officials have cited similar trends in arguing for the possibility of another rate cut to support growth.

Expectations of a potential rate reduction weighed on the U.S. dollar =USD, offering some support to commodities traded in the greenback. A weaker dollar makes dollar-priced metals more desirable for investors using other currencies.

Meanwhile, the longest U.S. government shutdown in history is nearing a possible end, as members of the Republican-controlled House of Representatives returned to Washington on Tuesday for a vote on a bill to fund federal agencies.

Market participants said the possible resolution could reduce near-term uncertainty and restore the flow of key economic data, though broader risk sentiment remained cautious.

Copper has seen a three-day gain since Monday, but the increase was slow due to soft demand, especially in biggest consumer China.

Consumption from Chinese copper-end users was flat in September, while ex-China consumption drove a 1% yearly growth, Citi analysts said in a note.

They, however, expect copper to stay near $11,000 a ton for now, supported by optimism over 2026 despite weak near-term demand, while noting copper could climb to $12,000 earlier than their mid-2026 forecast if new drivers emerge.

Elsewhere among SHFE base metals, aluminium SAFcv1 advanced 0.88%, lead SPBcv1 added 0.97%, tin SSNcv1 surged 1.75%, zinc SZNcv1 dipped 0.18%, and nickel SNIcv1 lost 0.62%.

Among other LME metals, aluminium CMAL3 gained 0.66%, lead CMPB3 rose 0.48%, tin CMSN3 nudged 0.23% higher, nickel CMNI3 dropped 0.29%, and zinc CMZN3 was little changed.

($1 = 7.1230 Chinese yuan)