(Adds comment, detail, updates prices) 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. "The recent driver of prices and demand in China has been the iron ore and steel rebar prices ... which tend to lead to general buying of all the industrial metals," said Kingdom Futures in a report. "Buyers seem to once again be positioning themselves for an expected improvement in demand, and thus prices, as we move forward into September and October."
* 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 flat at 50,260 a tonne.
* LME COPPER: London Metal Exchange copper was down 0.2 percent at $6,361.50 a tonne by 0619 GMT, having earlier jumped to $6,430.50, less than $10 below its most recent-two year high. Volumes were more than double usual levels at more than 7500 lots.
* SCREAMING SHORT: "The U.S. jobs was definitely a positive surprise from my perspective," said one U.S. based trader, adding that the dollar was likely to strengthen from here. "(Copper) is a screaming short right now."
* U.S. 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.
* SHFE aluminium rallied more than 3 percent to hit the highest since January 2013 on prospects of supply shutdowns in top producer China.
* PREMIUMS DROP: Premiums to obtain physical delivery of copper and zinc either in Shanghai or enroute to Shanghai fell, reflecting falling 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>
* OTHER METALS: LME nickel rallied 1 percent, chasing steel.
* GERMANY ECONOMY: German industrial production unexpectedly fell for the first time this year in June.
* 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.
Three month LME copper 6357.5 Most active ShFE 50370
Three month LME 1923.5
Most active ShFE 15165
Three month LME zinc 2814.5 Most active ShFE zinc 23430 Three month LME lead 2355.5 Most active ShFE lead 18960 Three month LME nickel 10355 Most active ShFE 84870
Three month LME tin 20620 Most active ShFE tin 147900 LME/SHFE COPPER LMESHFCUc3 584.46 LME/SHFE ALUMINIUM LMESHFALc3 130.25 LME/SHFE ZINC LMESHFZNc3 885.75 LME/SHFE LEAD LMESHFPBc3 -180.71 LME/SHFE NICKEL LMESHFNIc3 1938.46
(Reporting by Melanie Burton; Editing by Richard Pullin)