Adds analyst comment and dateline, updates prices

By Eric Onstad

LONDON, May 6 (Reuters) - Copper prices extended gains on Wednesday, touching their highest in nearly two weeks, on hopes that the U.S. and Iran are close to a deal to end the war in the Middle East.

Benchmark three-month copper CMCU3 on the London Metal Exchange rose 1.8% to $13,366 a metric ton by 0930 GMT, its third straight session of gains. It earlier hit its highest since April 23 at $13,380.50.

A U.S. media outlet reported that the White House believed it was closing in on a one-page framework agreement to end the war with Iran after U.S. President Donald Trump paused a naval mission to reopen the Strait of Hormuz.

"Copper is very strong after that headline about Iran and the U.S. agreeing to a one-page memo," said Robert Montefusco at broker Sucden Financial.

"We're also seeing oil coming off and then the other markets going up again."

Stocks and bonds jumped and the U.S. dollar dipped after the report about a one-page memorandum of understanding to end the war.

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 climbed 1.6% to 102,660 yuan ($15,029.98) a ton. Chinese markets resumed trading on Wednesday after May Day holidays.

Montefusco said the metals markets also received a lift from data showing services activity in top metals consumer China expanded at a faster pace in April, helped by stronger growth in new business.

LME aluminium prices CMAL3 shed 0.9% to $3,557.50 a ton on hopes of easing Middle East supply disruptions. The region accounts for about 9% of global production of the metal.

Analysts at ANZ expect aluminium prices to remain skewed to the upside, trading above $3,400 a ton.

"If the Strait of Hormuz reopens, prices may briefly dip, but renewed restocking by manufacturers should limit any significant downside," they said in a note.

Among other metals, LME nickel CMNI3 added 0.8% to $19,790 a ton after touching $20,000 for its highest since May 2024. Lead CMPB3 rose 0.8% to $1,987.50 and zinc CMZN3 climbed 1.9% to $3,433 while tin CMSN3 jumped by 6.2% to $52,800.