MELBOURNE, Feb 5 (Reuters) - London nickel steadied on Monday after posting its largest daily loss in two months in the session before, but prices were seen tailing off ahead of the
Lunar New Year next week. "Aside from the strengthening dollar, we think concerns about China's weak demand (have) also weighed on the nickel
price," said broker Argonaut Securities in a report. Some of China's stainless steel mills, the major consumers of nickel, are losing money at current prices and have already
wound down their operations, it said. "Looking into February, a week long Chinese Lunar New Year will further dampen production and demand. More steel plants are
expected to arrange care and maintenance therefore production of stainless steel is expected to contract further," it said. We expect to see price weakness in nickel going forward." 
FUNDAMENTALS: * NICKEL: London Metal Exchange Nickel slipped by 0.3 percent, adding to Friday's 4 percent plunge that was also
fanned by expectations of a glut due to growing nickel ore exports from Indonesia. Shfe nickel was down 2.5 pct. * COPPER: LME copper firmed by 0.5 percent amid a
flat to lower complex. It traded at $7,079 a tonne by 0543 GMT. Prices dropped 1 percent on Friday when they hit the highest in
a week at $7,188.50 before falling into the close. On the Shanghai Futures Exchange where prices have trended lower since late December, copper stayed down by 0.5
percent at 52,950 yuan ($8,407) a tonne. * U.S. job growth surged in January and wages increased further, recording their largest annual gain in more than 8-1/2
years, bolstering expectations that inflation will push higher this year as the labour market hits full employment. * PERU PRODUCTION: Higher supply overhung the market after
Peru, the world's No. 2 copper and zinc producer, reported a substantial rise in production. Copper production grew 3.9 percent to 2.4 million tonnes and zinc production surged by 10.2
percent to 1.5 million tonnes.  * LEAD: Lead prices took a breather from a 6-1/2-year top of $2,685 from Friday to tail back by 1 percent. 
* ALUMINIUM: Russian aluminium maker Rusal said on estimated that China's winter capacity cuts will curb output by 1 million tonnes annually.
    * INVESTORS: Hedge funds and money managers cut their net long position in COMEX copper in the week to Jan. 30, U.S. Commodity Futures Trading Commission (CFTC) data showed.
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