* LME/ShFE arb: http://tmsnrt.rs/2oQ5nm2 (Updates throughout, moves dateline from MELBOURNE)
LONDON, July 20 (Reuters) - Copper prices held near five-month highs on Thursday, helped by expectations of solid demand from top consumer China after industrial output expanded strongly in the second quarter, but a strengthening dollar limited gains.
Benchmark copper on the London Metal Exchange was up 0.2 percent at $5,972 at 1045 GMT, close to Monday's high of $6,022.50 - the first rise above $6,000 since March 2.
"There's still a halo effect from the stronger-than-expected Chinese numbers," ETF Securities analyst Nitesh Shah said.
CHINA ECONOMY: The Asian Development Bank raised its 2017 and 2018 growth forecasts for China and other countries in the region.
CHINA POLICY: Fitch Ratings said China's renewed commitment to contain financial risks signals a possible shift away from high economic growth targets, though policymakers were likely to act cautiously.
ECB: The European Central Bank is expected on Thursday to lay the groundwork for a shift towards tighter monetary policy. Investors were waiting to see how the euro-dollar exchange rate would be affected, a metals trader said.
DOLLAR: The dollar strengthened for a second day, making dollar-priced metals more expensive for holders of other currencies. 1/2FRX/ 3/8
COPPER STOCKS: On-warrant stocks in LME-registered warehouses remained near the highest since mid-May, falling 50 tonnes to 230,100 tonnes. <MCUSTX-TOTAL>
SPREADS: Discounts of cash copper, aluminum and lead to the three-month contracts rose to multi-year highs, signaling ample nearby supply. <MCU0-3> <MAL0-3> <MPB0-3>
SPECULATORS: "Net long positions in lead, copper, nickel and zinc are as much as 45 percent above the average," analysts at Commerzbank wrote in a note. "This entails the risk of a marked price correction if speculative financial investors choose to turn their backs on base metals."
CHINA STEEL: Chinese rebar and iron ore futures have risen by a quarter since mid-June, supporting industrial metals prices. Rebar is trading at 3-1/2-year highs.
CHINA-U.S. TRADE: Doubts were cast on President Donald Trump's economic and security relations with Beijing after the United States and China failed to agree on major new steps to reduce the U.S. trade deficit with China.
TRUMPCARE: Republicans failed to resolve differences in a long, late-night meeting on healthcare legislation, fueling doubts that Trump can deliver promised economic stimulus that would boost demand for metals.
PERU STRIKES: Unionised workers in Peru, the world's second-biggest copper producer, started a nationwide strike to protest against labor reforms, but significant disruptions to output were not expected.
PRICES: Aluminium inched up 0.2 percent to $1,923.50 a tonne, lead rose 0.3 percent to $2,223.50, tin inched up 0.1 percent to $20,115, zinc was steady at $2,746 while nickel fell 0.3 percent to $9,625.
(Additional reporting by Melanie Burton in Melbourne; Editing by Dale Hudson)