LONDON: Copper prices hit a five-week high on Friday and were on track to end August with the 3% growth due to a weaker dollar and rising bets that the Federal Reserve will cut interest rates in September.
Three-month copper on the London Metal Exchange rose 0.8% to $9,897.50 per metric ton by 1011 GMT after hitting $9,917 for its highest since July 25.
The dollar was poised for a 2% drop in August. A weaker U.S. currency makes dollar-priced metals more attractive for buyers using other currencies, while lower rates improve overall sentiment towards industrial metals as demand for them depends on economic growth.
In top metals consumer China, stocks closed up on Friday, capping their strongest monthly gain since September 2024, as abundant liquidity continued to drive the rally.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 2.4% this week, while the Yangshan copper premium, which reflects demand for copper imported into China, stabilised at $55 per ton, highest level since June 5.
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However, China’s factory activity likely contracted for a fifth straight month in August, with manufacturers awaiting more clarity on a trade deal with the U.S. while a wobbly job market and a property crisis curb domestic demand, a Reuters poll showed.
Analysts at Goldman Sachs held their year-end LME copper price forecast unchanged at $9,700 per ton.
“While LME stocks remain relatively low, we reiterate that we see no near-term risk of a global copper shortage,” Goldman Sachs said in a note.
According to the International Copper Study Group, the global refined copper market was in a 251,000 tons surplus in the first half of 2025 compared with a 395,000 metric tons surplus in the same period a year earlier.
Among other LME metals, aluminium rose 0.3% to $2,613 a ton, zinc added 1.1% to $2,812, lead climbed 0.2% to $1,987.50, tin gained 1.0% to $35,140, while nickel was up 0.7% at $15,365.
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