METALS-Copper slips on stronger dollar, rising inventories

Feb 5 (Reuters) - Copper fell for a second session on Thursday, tracking losses in the precious metals complex, as rising inventories and a stronger U.S. dollar weighed on prices.

Benchmark three-month copper on the London Metal Exchange CMCU3 was down 1% at $12,917.50 per metric ton as of 1731 GMT.

Copper earlier fell as much as 2% to $12,783 as industrial metals joined a broader rout across asset classes, including precious metals, where silver XAG= shed around 13% on a firmer dollar and easing U.S.-China trade tensions.

A stronger dollar .DXY makes dollar-denominated metals more expensive for holders of other currencies.

Copper inventories continued to rise, with LME stocks MCUSTX-TOTAL hitting 180,575 tons, the most since May 2025.

In China, inventories in Shanghai Futures Exchange warehouses CU-STX-SGH have climbed to their highest since April at 133,004 tons, in a seasonal buildup ahead of Lunar New Year.

Meanwhile, copper stocks on the U.S. Comex exchange HG-STX-COMEX stood at a record 529,962 tons.

"I think there's no physical shortage of copper today because there's a lot in the States," said SP Angel analyst John Meyer. The cash LME copper contract was trading at a discount of $83 a ton to the three-month forward CMCU0-3, suggesting scant demand for the metal in the near term.

"I strongly suspect the Chinese State Reserves Bureau is releasing some copper" to steady the market after the recent price spike, Meyer added. Copper hit a record $14,527.50 on January 29.

China will expand its strategic copper reserves, a senior official at the China Nonferrous Metals Industry Association said on Tuesday.

Macquarie estimated those reserves held 1.1 million tons, as it raised its first-quarter copper price forecast to $12,900 from $10,900, attributing the recent rally to fund positioning rather than fundamentals.

In a broad base metals slump, aluminium CMAL3 fell 0.9% to $3,040 a ton, zinc CMZN3 slipped 0.1% to $3,305.50, lead CMPB3 lost 0.5% to $1,956.50, nickel CMNI3 shed 1.7% to $17,075 and tin CMSN3 was down 3.8% to $46,050 after hitting its lowest since January 9.