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METALS-LME copper hovers near 4-1/2 month peaks, China outlook underpins

MELBOURNE, July 19 (Reuters) - London copper consolidated near four-and-a-half month highs on Wednesday, weighed down by a slightly firmer dollar but supported by a pick-up in China's industrial activity that helped drive second-quarter economic growth.

FUNDAMENTALS

* London Metal Exchange copper slipped by 0.3 percent to $5,990.50 a tonne by 0159 GMT, reversing a small gain in the previous session. Prices hit $6,022.50 a tonne on Monday, the highest since March 2.

* Shanghai Futures Exchange copper slipped by 0.3 percent to 47,710 yuan ($7,064) a tonne.

* Among other metals, SHFE zinc and lead both traded down 1.5 percent. LME nickel pared gains seen in the prior session when it ROSE 1.9 percent.

* A pick-up in the industrial sector helped China post better-than-expected second quarter economic growth as finance and real estate expansions slowed to multi-year lows, data showed on Tuesday.

* Japanese manufacturers' and service providers' business confidence held steady at high levels in July, a Reuters poll found on Wednesday, underlining the central bank's upbeat view on the economy.

* U.S. Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross said they will be looking for specific, "concrete" agreements from Beijing to increase U.S. access to China's growing consumer markets in bilateral economic talks on Wednesday.

* Zinc prices are running out of steam, with shortages in China appearing to be less severe than expected, inventories rebounding and producers selling the metal to take advantage of current market levels.

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MARKETS NEWS

* The dollar stayed on the defensive on Wednesday as investors wagered any further tightening in the United States would be slow at best, while optimism on China's economy underpinned Asian shares and commodities.

DATA/EVENTS 1330 US building permits, Housing Starts for June PRICES

BASE METALS PRICES 0158 GMT Three month LME copper 5990 Most active ShFE copper 47710 Three month LME 1926

aluminium

Most active ShFE 14395

aluminium

Three month LME zinc 2777.5 Most active ShFE zinc 22840 Three month LME lead 2261 Most active ShFE lead 17475 Three month LME nickel 9690 Most active ShFE nickel 79530 Three month LME tin 0 Most active ShFE tin 146640

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 515.01 LME/SHFE ALUMINIUM LMESHFALc3 -720.18 LME/SHFE ZINC LMESHFZNc3 557.9 LME/SHFE LEAD LMESHFPBc3 -952.57 LME/SHFE NICKEL LMESHFNIc3 2702.79

($1 = 6.7541 Chinese yuan renminbi)

(Reporting by Melanie Burton; Editing by Richard Pullin)