London copper was on course for a fourth consecutive monthly rise on Friday and zinc was headed for its best month in almost eight years as industrial metals were buoyed by a sliding dollar and better-than-expected factory activity in top consumer China.
A weaker greenback makes dollar-denominated metals cheaper for holders of other currencies and can support prices.
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London Metal Exchange copper stocks, which were at a six-month low of 129,225 tonnes, also helped drive sentiment.
“LME inventories continue to decline, and the (cash to three-month) spread premium has expanded, indicating that overseas demand has continued to improve,” brokerage Jinrui Futures wrote in a note. .
The LME does not have warehouses registered in mainland China.
FUNDAMENTALS
* COPPER: Three-month LME copper rose as much as 1.1% to $6,500 a tonne, and was at $6,489 as of 0730 GMT. The most-traded September copper contract on the Shanghai Futures Exchange ended flat at 51,820 yuan ($7,412.81) a tonne.
* COPPER: LME copper was on course to add 1.2% this week and jump 7.9% in July, having risen every month since April amid a China-led recovery in demand following the coronavirus outbreak.
* SHFE STOCKS: Copper inventories in ShFE warehouses rose 1.2% from the previous week to 159,513 tonnes, the exchange said on Friday.
* CHINA: Factory activity expanded in July for a fifth straight month and at a faster pace compared with analysts’ expectations.
* USD: The dollar slipped to two-year lows and is on track for its biggest monthly decline in 10 years.
* OTHER METALS: All LME metals were higher, with zinc rising as much as 2.1% to $2,334 a tonne, its highest since Jan. 24 and heading for a monthly gain of 13.5%, the most since September 2012. ShFE zinc hit its highest since Sept. 16.
Nickel was up 0.8% and set for its best month since August 2019, while aluminum gained 0.5% and was set for a 6.8% jump in July, which would be its biggest monthly rise since April 2018