(Updates prices) By Julian Luk LONDON, Aug 21 (Reuters) - Copper prices climbed onMonday after Reuters reported that China's state banks acted tostabilise a sliding offshore yuan, traders said, butdisappointment with China's latest package of measures to boosteconomic growth capped gains. Three-month copper on the London Metal Exchange(LME) was up 0.5% at $8,280 per metric ton at 1611 GMT afterthree consecutive weeks of losses on concerns about sluggishgrowth and demand in China and elsewhere. Metal traders said China's intervention in currency marketswas behind the reversal in prices of other industrial metalsincluding aluminium, zinc and lead. China's major state-owned banks were seen actively moppingup the offshore yuan, three people with knowledge of the mattersaid, as the currency comes under growing pressure from adarkening economic outlook and strain in the property sector. China cut its one-year benchmark lending rate on Monday andsurprised markets by keeping the five-year rate unchanged,falling short of market expectations of cuts to both rates. "Ongoing concerns about China's economy and property crisiscontinue to put pressure on the industrial metals complex," saidEwa Manthey, commodities strategist at ING. "All eyes are on whether Beijing will roll out more supportfor its ailing economy." Copper, used widely in the power and constructionindustries, has also come under pressure fromhigher inventories in LME approved warehouses. At 95,325 tonsthey have climbed 76% since July 12. Elsewhere, traders noted a large holding of lead warrants , which has fuelled concern about near-term suppliesof lead on the LME market.
This has created a premium or backwardation for the cashlead contract over the three-month contract. Earlieron Monday, the premium at $18.50 a ton is the highest sinceearly July and compares with a discount only a week ago. Three-month lead gained 0.7% to $2,165 a ton. In other metals, aluminium rose 0.3% to $2,142.50 aton, zinc advanced 0.8% to $2,319, tin was up1.6% to $25,675 and nickel added 0.1% to $20,150. (Reporting by Julian Luk; Editing by David Evans, Mark Potterand Hugh Lawson)
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