BENGALURU: London copper prices gained on Friday, having dropped to nearly four-month lows in the last session as swelling inventories and a rallying US dollar on higher-for-longer rate prospects set the metal on path for a weekly decline.

Three-month copper on the London Metal Exchange (LME) rose 0.6% to $8,243.50 per metric ton by 0303 GMT, after posting its worst one-day percentage decline since the start of August and hitting its weakest level since May 31 on Thursday.

The most-traded October copper contract on the Shanghai Futures Exchange slipped 0.8% to 68,180 yuan ($9,339.34) per ton. Inventories in LME-registered warehouses were at their highest level since May 2022.

The surge in copper inventories has the potential to send prices even lower as Mainland China’s economic growth remains uneven and the US dollar’s strength continues to cap global demand for industrial metals, analysts at BMI wrote in a note.

The dollar index stood near a six-month peak as US Treasury yields surged to 16-year highs after the Federal Reserve signaled another rate increase this year and tighter monetary conditions through 2024.

In other metals, LME nickel rose 0.9% to $19,255 a ton, but was hovering near its lowest since July 2022.

Copper heads lower ahead of Fed meeting, as inventories build

Aluminium jumped 1.5% to $2,244, zinc was 1.3% higher at $2,546, lead firmed 0.7% to $2,197.50, and tin was up 0.5% at $25,585.

SHFE nickel dropped 1.6% to 157,250 yuan a ton, lead lost 0.2% to 17,070 yuan, tin shed 1.6% to 217,470 yuan, while SHFE aluminium gained 1% to 19,605 yuan and zinc jumped 1% to 22,025 yuan.

The global nickel market had a surplus of 28,600 tons in July, data from the International Nickel Study Group showed on Thursday.