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METALS-Shanghai copper flirts with four-year top

MELBOURNE, Aug 7 (Reuters) - Shanghai copper came within a whisker of its highest in four years on Monday after a rally in steel unleashed short-covering across metals, before prices quickly retraced in line with a stronger dollar.

FUNDAMENTALS

* SHFE COPPER: Shanghai Futures Exchange copper surged more than 1 percent to top out at 51,060 yuan, just shy of February's 51,200 yuan high, a breach of which would take prices back to levels last seen in April 2013. SHFE copper last traded down 0.3 percent at 50,260 a tonne.

* LME COPPER: London Metal Exchange copper fell half a percent $6,343 a tonne by 0137 GMT, having earlier jumped to $6,430.50, less than $10 below its most recent-two year high. Volumes were roughly treble the average for early Asia, around 5500 lots.

* SCREAMING SHORT: "The U.S. jobs was definitely a positive surprise from my perspective. (Copper) is a screaming short right now," said one U.S. based trader.

* US JOBS: U.S. employers hired more workers than expected in July and raised their wages, signs of labour market tightness that likely clears the way for the Federal Reserve to announce a plan to start shrinking its massive bond portfolio.

* PREMIUMS DROP: Premiums to obtain physical delivery of copper and zinc either in Shanghai or enroute to Shanghai fell, reflecting a decline in physical demand due to high prices. Nickel premiums hit the highest in two years, due to robust financing demand. <0#BASEBW-SHMET> <0#BASECIF-SHMET>

* N. KOREA: China's foreign minister said on Sunday new U.N. Security Council sanctions on North Korea were the right response to a series of missile tests, but dialogue was vital to resolve a complex and sensitive issue, now at a "critical juncture".

* COPPER SPECS: Hedge funds and money managers boosted their net long position in COMEX copper to a record high in the week to Aug. 1 U.S. Commodity Futures Trading Commission data showed on Friday.

* WAREHOUSES: The London Metal Exchange is seeking agreement from its network of metal warehouse owners to cut the rents charged for storage, which could boost the amounts of metal registered under LME warrant and improve transparency.

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MARKETS NEWS

* Asian stocks advanced on Monday, taking their cue from Wall Street's strong end to the previous week, while the dollar finally pulled ahead after stronger-than-expected jobs growth in July.

DATA AHEAD (GMT) China Forex reserves Jul 0600 Germany Industrial output Jun 1400 U.S. Employment trends Jul

*No fixed schedule ATA/EVENTS

PRICES

BASE METALS PRICES 0104 GMT Three month LME copper 6416.5 Most active ShFE copper 50930 Three month LME 1911.5

aluminium

Most active ShFE 14890

aluminium

Three month LME zinc 2828.5 Most active ShFE zinc 23645 Three month LME lead 2366 Most active ShFE lead 18735 Three month LME nickel 10390 Most active ShFE nickel 85400 Three month LME tin 20600 Most active ShFE tin 147810

(Reporting by Melanie Burton; Editing by Richard Pullin)