(Updates prices, adds comment) By Pratima Desai LONDON, May 24 (Reuters) - Copper prices rose on Monday as asofter dollar spurred modest purchases, but gains were capped byconcerns over price curbs on industrial metals in top consumerChina. Benchmark copper on the London Metal Exchange (LME)was up 0.6% to $9,939 a tonne at 1600 GMT.
However, prices of the metal, used widely in the power andconstruction industries, are down 8% since touching a recordhigh of $10,747.50 a tonne this month. "The dollar is giving some support to copper, but overallthe mood is negative," a metals trader said. "Still, the marketdid need a breather and consolidation."
PRICES: China's market regulators warned industrial metalcompanies to maintain "normal market order" during talks on thesignificant gains in metals prices this year. The Beijing government also said last week that it wouldmanage "unreasonable" price increases for commodities such ascopper, coal, steel and iron ore. "If metal prices start rising again we could see theimposition of formal price controls on certain industries,coupled with limits on futures trading," said ED&F Man CapitalMarkets analyst Edward Meir. "In such a hyper-charged regulatory environment, Chinesefunds must be thinking twice about initiating aggressive longpositions and are likely paring the length they already have onthe books." DOLLAR: A lower U.S. currency makes dollar-denominatedmetals cheaper for holders of other currencies, which couldpotentially boost demand. SPREAD: Some concern about supplies on the LME market hasnarrowed the discount for cash copper over the three-monthcontract to about $14 a tonne from $28 last week. CHILE: Supporting copper is political uncertainty in Peruand top producer Chile. An overhaul of Chile's market-orientated constitution isunder way and the country is debating whether to increaseroyalties on miners. Peru, the No. 2 producer, is heading for a polarised Junepresidential election. Leading in the polls is a little-knownsocialist who wants to redistribute mining wealth. OTHER METALS: Aluminium gained 0.9% to $2,392 a tonne, zinc fell 0.8% to $2,947, lead ceded 2.4% to $2,136,tin slipped 0.1% to $29,490 and nickel rose 2% to$17,125. (Reporting by Pratima DesaiEditing by David Goodman/Mark Heinrich)
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