Metals-Concerns about low stocks set copper on track for 3% monthly gain

Among other LME metals, aluminium lost 0.2% to $3,189, although the metal is still up 3% this month due to worries about shipments from the Gulf region amid the Iran war.

"Supply conditions are improving, particularly as Middle Eastern production recovers and Chinese exports remain elevated, but the market is still expected to remain in deficit," Manthey said.

LME zinc rose 0.5% to $3,640 having hit highest since June 3 of $3,648.5, lead fell 1.0% to $1,876.50, tin gained 0.5% to $55,235 and nickel eased 0.1% to $17,240.

China's yuan rose to its highest level against the dollar in more than three years on Friday, making dollar-priced metals more attractive for Chinese buyers.

However, a recent wave of demand in the country faded, with the Yangshan copper premium, a gauge of interest in importing metal to China, stabilising at $112 a ton since hitting $115, the highest since November 2022, on July 22.

Weighing further on the overall sentiment, China's factory activity unexpectedly slipped into contraction in July, pressured by shrinking new orders.

Copper prices were little changed on Friday and on track to have risen 3% in July following increased risk appetite in equity markets and worries about a lack of visible stocks outside the U.S.

Benchmark three-month copper on the London Metal Exchange was down 0.1% at $13,786.50 a metric ton by 1610 GMT after hitting $13,883, its highest level since July 22.