(Corrects milestone in headline to 4-1/2-mth peak, from 3-1/2-mth peak) MELBOURNE, July 17 (Reuters) - London copper hit its highest since early March on Monday, supported by a weaker dollar and as an upbeat second quarter for China's economy brightened demand prospects for metals. China's economy grew 6.9 percent in the second quarter from a year earlier, faster than expected and in line with the first quarter's growth. Its property sector, a key metals user, also showed underlying demand remained resilient to government curbs.
"I'm still bullish on copper. The property backdrop is still good; China economy and industrial production numbers are still good. Orders are coming through from state grid," said analyst Dan Morgan at UBS in Sydney.
* LME COPPER: London Metal Exchange copper had climbed 0.8 percent to $5,970.50 a tonne having earlier struck its highest since March 2 at $5,986.50. Prices added to Friday's near 1-percent gains.
* SHFE COPPER: Shanghai Futures Exchange copper gained 1.3 percent to 47,780 yuan ($7,053) a tonne. ShFE nickel jumped 4 percent following increased demand from China's steel sector, where prices have also rallied.
* CHINA ALUMINIUM, STEEL: China churned out record amounts of steel and aluminum in June as producers rushed to cash-in on rallying prices in the wake of a drive by Beijing to crack down on output of low-grade metal.
* US ECONOMY: U.S. consumer prices were unchanged in June and retail sales fell for a second straight month, pointing to tame inflation and soft domestic demand that diminished prospects of a third interest rate increase from the Federal Reserve this year.
* COPPER SPECULATORS: Hedge funds and money managers cut their net long position in COMEX gold in the week to July 11, as they reduced their net long position in copper futures and options, U.S. Commodity Futures Trading Commission data showed on Friday.
* MARKETS: Asian stocks hit a two-year high on Monday, boosted by stronger-than-expected economic growth in China and bets that lackluster U.S. data will keep the Federal Reserve cautious about the pace of policy tightening.
* COMING UP: U.S. Fed Chair Janet Yellen delivers her second day of semiannual monetary policy testimony before the Senate Banking Committee.
BASE METALS PRICES 0619 GMT Three month LME copper 5969 Most active ShFE copper 47680 Three month LME aluminum 1933 Most active ShFE aluminum 14505 Three month LME zinc 2824.5 Most active ShFE zinc 23190 Three month LME lead 2321.5 Most active ShFE lead 17810 Three month LME nickel 9570 Most active ShFE nickel 78810 Three month LME tin 19985 Most active ShFE tin 145240
BASE METALS ARBITRAGE
LME/SHFE COPPER LMESHFCUc3 527.48 LME/SHFE ALUMINIUM LMESHFALc3 -699.96 LME/SHFE ZINC LMESHFZNc3 491.34 LME/SHFE LEAD LMESHFPBc3 -1237.6 LME/SHFE NICKEL LMESHFNIc3 2754.26
($1 = 6.7740 Chinese yuan renminbi)
(Reporting by Melanie Burton; Editing by Joseph Radford and Biju Dwarakanath)