Copper steady on hopes of demand boost from China

LONDON, May 31 (Reuters): Copper prices touched their highest in over three weeks on Tuesday on hopes that lifting China's lockdown restrictions will boost demand, but a stronger dollar chipped away at the gains.

Three-month copper on the London Metal Exchange CMCU3 was little changed at $9,540 a tonne by 1037 GMT, after earlier hitting its highest since May 5 at $9,591.50.

U.S. Comex copper HGcv1 gained 0.8% to $4.34 a lb.

Shanghai authorities removed lockdown fences on Tuesday, preparing to lift a two-month lockdown at midnight, while China's cabinet announced a package of 33 stimulus measures to revive its pandemic-ravaged economy.

"The news from China is just enough to create a refocus in the market towards a possibility of a pick up in demand," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

"If we haven't seen it already, we're very close to having seen a bottom in industrial metals, where we can bounce."

Copper slid 18% during about two months after touching a record high of $10,845 a tonne in early March on fears about a slowdown in China and inflation disrupting economies elsewhere.

In May, LME copper is on track for its second monthly decline with a drop of 2.2%.

But weak inventory levels were a sign of underlying strength in the market, Hansen added.