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METALS-Copper ticks higher on strong China data, weak dollar

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(Updates with official prices) By Eric Onstad LONDON, July 31 (Reuters) - Copper prices recovered on Friday and were set for a fourth straight monthly gain, after strong factory activity in top metals consumer China raised hopes about demand. China's factories stepped up activity in July for a fifth consecutive month as the manufacturing Purchasing Manager’s Index marked its highest reading since March. "The numbers in China could continue to recover," said Xiao Fu, head of commodity market strategy at Bank of China International in London. "Normally during the summer months there tends to be a seasonal slowdown, but this year could be different because companies will try to ramp up as much as they can to make up for lost time earlier this year," Fu said.


Benchmark copper on the London Metal Exchange rose 0.1% to $6,439.50 a tonne in official trading after declining on Thursday. It was on course for a 7% gain in July, having risen every month since April amid a China-led recovery in demand following the coronavirus outbreak.


* DOLLAR: A weak dollar index also supported metals, slipping to a two-year low of 92.539 and on track for its biggest monthly decline in 10 years.


A weaker greenback makes dollar-denominated metals cheaper for holders of other currencies and can support prices. "If the dollar continues to weaken and the dollar index goes below 90, which is quite likely, it could propel copper prices even higher,” Fu said.


* LME STOCKS: Copper inventories in LME warehouses fell to new six-month lows of 128,125 tonnes, the lowest since Jan. 17.


* PRICES: LME aluminium gained 0.1% to $1,722 a tonne in official activity and was set for a near 7% jump in July, which would be its biggest monthly rise since April 2018. Zinc climbed to a six-month peak of $2,334 and was headed for a monthly gain of 13%, the most since September 2012. It was last up 1.1% at $2,311. Nickel rose 0.6% to $13,806, lead slipped 0.6% to $1,861, and tin added 0.1% to $17,822. (Additional reporting by Tom Daly in Beijing Editing by David Holmes, Kirsten Donovan)


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