London - Copper extended last month's losses on Monday as investors cautiously awaited key US data this week, and as concerns over swelling supplies eclipsed improved manufacturing data from top copper consumer China.

China's factory activity maintained steady growth momentum in November, the HSBC/Markit Purchasing Managers' Index (PMI) showed earlier.

That followed an official survey released over the weekend showing China's factory growth held at an 18-month high last month.

But weighing on copper, the dollar rose versus a currency basket, making dollar-priced metals more expensive for non-US investors, while manufacturing activity in the euro zone remained weak overall 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 its debatable how big,” said VTB capital analyst Andrey Kryuchenkov.

“For this week the range is going to be narrow until the non-farm payrolls, then (the) range could widen but we're unlikely to see sustained gains until seasonality kicks in next year,” he added.

Three-month copper on the London Metal Exchange traded down 0.64 percent at $7,009.75 a tonne by 13:09 SA time, after posting a half-percent gain the previous session.

Copper recorded its biggest monthly loss since June last month, dogged by expectations 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 has put a floor under prices.

Earlier, daily LME data showed copper stocks fell by another 3,425 tonnes to 420,400 tonnes, their lowest point since mid-February. Stocks have been falling consistently since June this year.

Nevertheless the market remains convinced about a looming surplus. Mine output of copper has grown by around 944,000 tonnes year to date, almost twice the pace of primary refined output which is up by 525,000 tonnes, Barclays said in a report.

The surplus talk has left investors rattled.

Hedge funds and money managers increased copper's net short or sell bets in futures and options for the week ended November 19, a report by the Commodity Futures Trading Commission showed on Friday.

Looking ahead, US data due later in the week remain a key focus, especially non farm payrolls on Friday.

The Federal Reserve is poised to reduce its stimulus as soon as it deems the economy strong enough, a factor that would weigh on copper.

Economists expect an increase of 185,000 jobs last month, down from 204,000 in October, according to a Reuters survey.

Among other metals, consumer buying interest has not picked up in aluminium, despite prices at four year lows, at $1,741.25 a tonne on Friday, 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.”

However, nickel, the biggest loser of the base metals complex in November and down more than 20 percent so far this year, may be set to rebound given January's looming Indonesian ban on raw materials exports, said Barclays Capital.

“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.

“Given the potential supply disruption, combined with short market positioning, the balance of risks to prices is to the upside.” - Reuters