(Updates prices, adds analyst comment, changes dateline to

London)

By Polina Devitt

LONDON, May 22 (Reuters) - Copper prices rose on Friday

as falling available inventories offset expectations of

seasonally muted demand in top metals consumer China and

uncertainty around progress in U.S.-Iran peace talks.

Three-month copper on the London Metal Exchange was

up 1.0% at $13,642 a metric ton by 1000 GMT.

Available copper stocks in LME-registered warehouses fell to a

10-week low, LME daily data showed, after 53,325 tons were

earmarked for delivery.

More than half of these cancellations were in LME warehouses in

the U.S., where COMEX copper was trading at a premium

over the LME benchmark as the market waited for Washington's

decision on whether to impose import tariffs by the end of June.

"The tightness in the copper market has been exacerbated by

the tons pulled into the U.S., where they don't usually sit,"

said Ben Davis, head of European metals and mining research at

RBC Capital Markets.

The copper market risks facing a massive return of stocks from

the U.S. back to the supply chain if the threat of Washington's

tariffs is removed, he added.

On the demand side, the Yangshan copper premium -

a gauge of China's appetite for importing copper - remained at

$73 a ton this week, its highest since mid-April.

However, demand in China is expected to taper soon as the

country enters an off-season. Copper stocks in warehouses

monitored by the Shanghai exchange this week rose

for the first time since mid-March, gaining 1.6%.

"Downstream consumption has weakened, and cargo pick-up has

slowed," said analysts at Chinese broker Galaxy Futures.

Meanwhile, LME aluminium rose 0.3% to $3,647. Reduced

supply from producers in the Gulf amid the Iran war is keeping

the premium of the LME aluminium cash contract against the

benchmark high, indicating tightness. The premium was

last at $79.

LME lead fell 0.1% to $2,002.50 after hitting a one-week

high of $2,010. The discount of the LME cash contract versus the

benchmark swung to a premium this week .

Zinc rose 0.8% to $3,550.50, tin gained 0.7%

at $53,240, while nickel climbed 0.2% to $18,760.