* LME copper stockpiles highest since February
* Nickel is biggest loser, falls back below $10,000/T
* Coming up: U.S. ADP national employment at 1215 GMT (Recasts, updates prices)
By Manolo Serapio Jr
MANILA, July 7 (Reuters) - London copper futures gave up modest gains to trade lower for a fourth day running on Thursday as inventories of the industrial metal hit a five-month high, reflecting slow demand.
Nickel also surrendered early gains, falling nearly 2 percent after earlier topping $10,000 a tonne amid continuing concerns about potential disruptions to the supply of nickel ore from top exporter Philippines to China.
Three-month copper on the London Metal Exchange was down 0.4 percent at $4,732 a tonne by 0707 GMT, closing in on Wednesday’s one-week low.
The most-traded September copper contract on the Shanghai Futures Exchange slid 1.3 percent to 36,910 yuan ($5,522) a tonne.
Stocks of copper in LME-approved warehouses rose by a sizable 23,625 tonnes to 222,550 tonnes, the highest since February. The inventory level has surged 58 percent from early April. MCU-STOCKS
Despite the sustained rise, Argonaut Securities analyst Helen Lau said the global copper market may be facing a shortage in the years ahead as lack of funding and rising political risks could push back mining projects and expansions.
“Looking beyond short-term volatility being affected by swings in currency and inventories, the long-term supply outlook is worrisome,” Lau said in a note.
LME nickel dropped 1.9 percent to $9,780 a tonne after peaking at $10,175 earlier. In Shanghai, nickel fell 1.5 percent to close at 77,270 yuan a tonne, after earlier touching 80,900 yuan.
The metal, used in making stainless steel, hit an eight-month peak of $10,410 on LME on Monday.
Copper and other base metals earlier tracked a recovery in risk assets in Asia from oil to equities after Wednesday’s selloff that was spurred by renewed fears on the global impact of Britain’s exit from the European Union.
Market participants will next be eyeing the U.S. nonfarm payrolls report on Friday. Mizuho Bank said a weak number “will validate the view that the Fed will remain on hold for a while.”
Federal Reserve policymakers decided in June that interest rate hikes should stay on hold until they have a handle on the consequences of Britain’s vote on EU membership, according to the minutes of the Fed’s policy meeting last month.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
$1 = 6.6844 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Ed Davies and Christian Schmollinger