* LME/ShFE arb: http://tmsnrt.rs/2oQ5nm2 (Updates prices, adds details, comment)
LONDON, July 31 (Reuters) - The price of copper hit a two-year peak on Monday on upbeat manufacturing data in top consumer China and a weaker dollar, while nickel hit a near four-month high on renewed supply worries and soaring steel prices.
Growth in China's manufacturing sector cooled slightly in July, as foreign demand for Chinese goods slackened, but a government-led drive to develop infrastructure boosted growth in the construction sector..
The data, combined with an environmental crackdown in China, sent Chinese steel prices to their highest level since December 2013. Nickel is sensitive to steel prices as it is mainly used in stainless steelmaking.
"Confidence in a second-half slowdown is somewhat softening and this is then reflected in a more positive assessment of industrial metals given they are so closely related to the Chinese economy," said Carsten Menke, analyst at Julius Baer.
* COPPER: London Metal Exchange copper rose 1.2 percent to $6,401 a tonne by 1006 GMT, having hit $6,430, the highest since May 2015.
* COPPER SPECULATORS: Hedge funds and money managers increased their net long position in COMEX copper in the week to July 25, data showed on Friday. Managed net long positions are at their highest level since April.
"The latest rise in the copper price was driven largely by speculation. In our opinion considerable correction potential has meanwhile developed," said Commerzbank in a note.
* NICKEL: Nickel rose 0.7 percent to $10,270, having earlier hit its highest level since early April at $10,355.
* PHILIPPINES: The Philippines' environment minister Roy Cimatu said on Monday he would not lift a ban on open-pit mining imposed in April in an anti-pollution crackdown, as an inter-agency mining council reviews how miners are taxed.
The Philippines is the world's top nickel ore supplier.
* NORILSK: Russia's Norilsk Nickel (Nornickel), one of the world's largest nickel producers, said its second-quarter consolidated nickel production fell 8 percent quarter-on-quarter to 49,000 tonnes.
* DOLLAR: The dollar held near a 13-month low against a basket of currencies on Monday, weighed down by political uncertainty and increased short positions, but markets were wary of pushing it lower before data due later this week.
* ANTOFAGASTA Chile's Antofagasta could green-light a $1.1 billion revamp of its Los Pelambres copper mine in the first months of 2018, as rising copper prices buoy spirits in the sector.
* ZINC STOCKS: On-warrant or available zinc inventories in LME-registered warehouses continued to build up, with 9,525 more tonnes registered as available, boosting the total to 155,650 tonnes, up 123 percent over the past 2-1/2 weeks.
(Additional reporting by Melanie Burton; Editing by Greg Mahlich)