(Updates prices) By Pratima Desai LONDON, May 23 (Reuters) - Copper prices climbed to theirhighest in more than two weeks on Monday, buoyed by declininginventories and a weaker dollar, though gains were capped by thedamage to demand from coronavirus lockdowns in top consumerChina. Benchmark copper on the London Metal Exchange (LME)was up 1.3% at $9,546 a tonne at 1602 GMT. Prices of the metalused in the power and construction industries earlier touched$9,558 for its highest since May 5. "Key traumas have been factored into metals markets, whichare settling down," said Liberum analyst Tom Price, referringthe surge in demand after the lifting of lockdowns, the war inUkraine and increases to U.S. interest rates. Even if China eases lockdown controls and tries to stimulategrowth, the strongest period for metals demand - typically thesecond quarter - has already passed, Price said. "Stimulus in China now is really a story for 2023." COPPER: Inventories of copper inLME-registered warehouses fell by 3,525 tonnes to 171,075tonnes.
Cancelled warrants - metal earmarked for delivery - are at46% of total inventories, suggesting that more metal is due toleave LME warehouses over the coming days. With one firm holding large amounts of warrants, this hasfuelled concern about availability on the LME market and createda premium for the cash contract over three-month copper . DOLLAR: A weaker U.S. currency makes dollar-pricedcommodities cheaper for holders of other currencies, which couldboost demand. ALUMINIUM: Stocks of aluminium in the LMEsystem are at their lowest since late 2005 at 497,250 tonnes,while cancelled warrants stand at 60%.
Traders say much of this aluminium will be heading forEurope, where record high power prices have led to productioncuts and shortages.
Benchmark aluminium was up 0.4% at $2,958 a tonne,having earlier touched its highest since May 5 at $2,998. LEAD: Stocks at 38,850 tonnes, the lowestsince 2007, have boosted lead. It was last up 1.1% at $2,185 atonne, retreating from an earlier two-week high of $2,195. OTHER METALS: Zinc gained 2.1% to $3,786 a tonne,tin was down 0.2% at $34,595 and nickel ceded 1%to $27,700. (Reporting by Pratima DesaiEditing by David Goodman)
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