METALS-Copper set for 3% monthly gain on interest rate and demand hopes

By Polina Devitt

LONDON, Aug 29 (Reuters) - Copper prices hit a five-week high on Friday, on track to end August with 3% growth, on expectations of a cut to U.S. interest rates and increased demand in September.

Three-month copper CMCU3 on the London Metal Exchange was 1.0% higher at $9,914 a metric ton by 1600 GMT after touching its highest since July 25 at $9,918.

"Part of it is because the dollar is a bit weaker. But there has also been some strong data recently, such as upward revision of U.S. second-quarter GDP growth," said Dan Smith at Commodity Market Analytics.

"We are also heading for September, which tends to be a better month for demand than the summer period."

The U.S. currency was poised for a monthly retreat of 2% in August, making dollar-priced metals more attractive for buyers using other currencies. FRX/

In top metals consumer China, the yuan registered its biggest monthly gain against the dollar since May.

Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 2.4% this week while the Yangshan copper premium SMM-CUYP-CN, which reflects demand for copper imported into China, stabilised at $55 a ton, its highest since June 5.

Tin CMSN3 was up 0.4% at $34,890 a ton after touching $35,390 for its highest in almost five months.

Supporting the contract are low stocks in LME-registered MSNSTX-TOTAL and ShFE-monitored SN-STX-SGH warehouses as well as speculative buying, even though physical demand is weak, said a tin trader.

Major refined tin producer Yunnan Tin 000960.SZ said on Friday that it stopped production for routine maintenance for up to 45 days, although this will not affect its 2025 output plan.

LME aluminium CMAL3 rose 0.4% to $2,616.50, zinc CMZN3 added 1.5% to $2,821.50, lead CMPB3 gained 0.5% to $1,993.50 and nickel CMNI3 was up 1.0% at $15,415.

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