BEIJING - Copper prices fell on Friday as China and U.S. economic data fanned demand concerns, while Shanghai nickel jumped after global commodity trader Trafigura uncovered an up to $577 million loss on an alleged nickel fraud.

Three-month copper on the London Metal Exchange was down 0.2% at $8,962 a tonne by 0801 GMT, while the most-traded March copper contract on the Shanghai Futures Exchange eased 0.1% to 68,420 yuan ($10,061.91) a tonne.

China's January factory gate prices fell more than expected, suggesting that flashes of domestic demand that had stoked consumer prices after the zero-COVID policy ended were not strong enough to rekindle upstream sectors.

Meanwhile, a report on Thursday showed the number of Americans claiming unemployment benefits increased more than expected last week, reigniting recession fears.

On the supply side, China's MMG Ltd said its Las Bambas copper mine in Peru was able to secure critical supplies, enabling it to continue production at a reduced rate after road blockades prevented arrival of key raw materials.

SHFE nickel advanced 3.9% to 218,560 yuan, after Trafigura said on Thursday it booked a $577 million charge in the first half, after discovering that some nickel cargoes it received did not contain the metal in a case of "systematic fraud".

"The (Shanghai nickel) contract with low stocks and liquidity was boosted by the news of the alleged fraud," a Beijing-based analyst said.

Nickel stocks in SHFE warehouses rose 20.2% on-week to 3,380 tonnes on Friday, having touched a six-month low at 2,224 tonnes on Jan.20.

In the physical market, demand is constrained by high inventories of stainless steel, the main consumer of nickel.

But a recovery is likely as stainless steel producers have increased planned production in the wake of better demand from end users including new energy vehicles, according to Guangda Futures.

LME nickel retreated 0.1% to $29,125 a tonne after a gain of 6.4% on Thursday, aluminium lost 0.8% to $2,478.50, tin shed 1.8% to $27,245, zinc was down 0.3% to $3,115, and lead slipped 0.3% to $2,119.50.

SHFE aluminium fell 1.7% to 18,630 yuan a tonne, zinc eased 0.4% to 23,240 yuan, tin decreased 0.6% to 217,460 yuan, while lead gained 1% to 15,395 yuan.

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(Reporting by Siyi Liu and Dominique Patton; editing by Uttaresh.V and Subhranshu Sahu)