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METALS-London metals bide time ahead of China industrial report

MELBOURNE, Aug 14 (Reuters) - London copper and aluminium rose on Monday, holding near recent two-year peaks on a weaker dollar, while markets looked to China industrial data due later for signals on demand strength in the world's top metals consumer.

FUNDAMENTALS

* London Metal Exchange copper edged up 0.3 percent to $6,430 a tonne by 0116 GMT, after closing slightly softer on Friday. Prices hit the highest in more than 2-1/2 years on Aug. 9 at $6,515 a tonne.

* Shanghai Futures Exchange copper traded up half a percent. Other metals were all a touch firmer.

* Reflecting ample available supply, Shanghai aluminium and copper inventories surged, weekly inventory data on Friday showed. Shfe copper stocks have been rising since the start of August to hit the highest in two months above 200,000 tonnes.

* Shfe aluminium stocks <AL-STX-SGH> which have been climbing all year, hit the highest since May 2013, at 473,000 tonnes, as traders stockpile metal in warehouses in case of winter cuts, encouraged by financable spreads.

* Nearby nickel <CMNIT-0> spreads blew out to $4.90 for tomorrow against next day delivery, while aluminium cash to three month spreads <CMAL0-3> have also sharply narrowed, suggesting shorts are likely to deliver against their positions where possible as the prime traded contract expires this week.

* Copperbelt Energy Corp (CEC), Zambia's main supplier of power for its mines, confirmed on Sunday that it has restricted the amount of electricity it supplies to Glencore unit Mopani Copper Mines (MCM) because of a dispute over tariffs.

* Chilean state miner Codelco , the world's second largest producer of copper, is preparing to invest in Mongolia as the copper market improves, the company's chief executive told Reuters.

* U.S. consumer prices rose slightly in July as higher food costs were partly offset by falling prices for a range of other goods, suggesting benign inflation that could persuade a cautious Federal Reserve to delay raising interest rates until December.

* Hedge funds and money managers lifted their net long position in copper futures and options further to a fresh record, U.S. Commodity Futures Trading Commission data showed on Friday.

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MARKETS NEWS

* Asian stocks bounced on Monday after three losing sessions, tracking a firmer Wall Street, while the dollar was weighed down by weak U.S. inflation data which dampened prospects of another Federal Reserve interest rate hike later this year.

DATA AHEAD (GMT) 0200 China Industrial output Jul 0200 China Retail sales Jul 0200 China Urban investment Jul 0900 Euro zone Industrial production Jun PRICES

BASE METALS PRICES 0115 GMT Three month LME copper 6434.5 Most active ShFE copper 50440 Three month LME aluminium 2045 Most active ShFE aluminium 16090 Three month LME zinc 2911.5 Most active ShFE zinc 24095 Three month LME lead 2337 Most active ShFE lead 18985 Three month LME nickel 10685 Most active ShFE nickel 87000 Three month LME tin 0 Most active ShFE tin 145400

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 497.33 LME/SHFE ALUMINIUM LMESHFALc3 255.95 LME/SHFE ZINC LMESHFZNc3 935.26 LME/SHFE LEAD LMESHFPBc3 144.19 LME/SHFE NICKEL LMESHFNIc3 2338.77

(Reporting by Melanie Burton; Editing by Richard Pullin)