METALS-London copper slips as dollar sparks profit-taking, aluminum up

(Updates prices) MELBOURNE, Aug 2 (Reuters) - London copper slipped on Wednesday but stayed within reach of two-year highs hit earlier this week, as a slightly firmer dollar sparked profit-taking while a brightening view of China's growth prospects underpinned prices. Aluminum in London and Shanghai climbed on talks of more cuts to production capacity in China. The dollar extended its modest bounce from 15-month lows on Wednesday, benefiting from a pause in selling of the battered currency as investors begin positioning for key events this week, notably Friday's U.S. employment report. A stronger dollar tends to depress appetite for commodities because it makes them more expensive for holders of other currencies. Fundamentally, appetite has picked up for metals, after a solid round of economic reports this week, said economist Amy Li of National Australia Bank in Melbourne. "The market overall is a bit more bullish. Chinese demand has been resilient, China's data on Monday was reasonably strong especially around real estate and infrastructure sectors," the economist said.

* LME COPPER: Three-month copper on the London Metal Exchange had slipped 0.5 percent to $6,315 a tonne by 0515 GMT, following a small loss in the previous session. Prices jumped into a new range above $6,000 a tonne late last month, striking the highest since May 2015 at $6,400 a tonne.

* SHFE COPPER: Shanghai Futures Exchange copper slipped 0.6 percent to 50,030 yuan ($7,441) a tonne.

* ALUMINIUM: LME aluminum climbed 1.1 percent to its highest in three days, while ShFE aluminum finished up by 2.1 percent. Traders said there was talk of ongoing capacity curbs in Shandong province.

* CHINA ECONOMY: Growth in China's manufacturing quickened in July, a private survey showed on Tuesday, as output and new orders rose at the fastest pace since February on strong export sales.

* U.S. ECONOMY: A gauge of U.S. factory activity slid from a near three-year high in July amid a slowdown in new orders and consumer spending barely rose in the prior month, setting the stage for a moderate economic expansion in the third quarter.

* TRADE: U.S. President Donald Trump is close to a decision on how to respond to what he considers China's unfair trade practices, a senior Trump administration official said on Tuesday.

* LME NICKEL: LME nickel slipped by 1 percent from around four-month highs struck early this week on expectations Indonesian ore shipments could offset any losses from the Philippines, which is in the midst of a crackdown on mining pollution.


BASE METALS PRICES 0726 GMT Three month LME copper 6326 Most active ShFE copper 50020 Three month LME aluminum 1930 Most active ShFE aluminum 14765 Three month LME zinc 2772 Most active ShFE zinc 23050 Three month LME lead 2339 Most active ShFE lead 18440 Three month LME nickel 10230 Most active ShFE nickel 82110 Three month LME tin 20390 Most active ShFE tin 146300



($1 = 6.7239 Chinese yuan renminbi)

(Reporting by Melanie Burton; Editing by Richard Pullin and Joseph Radford)