* LME/ShFE arb: http://tmsnrt.rs/2oQ5nm20 (Updates throughout)
LONDON, Aug 31 (Reuters) - Copper prices rose to their highest level in almost three years on Thursday, taking gains in August to 7.5 percent after an acceleration in Chinese manufacturing boosted the outlook for demand in the world's top metals consumer.
Copper is set to gain for a third consecutive month with aluminum, nickel and zinc on track for their biggest monthly increases in several years.
The Chinese factory data was "just another bullish story to throw into the pool of bullish sentiment that we have for base metals," ING analyst Warren Patterson said.
However, he said prices were moving away from fundamentals as speculative investors poured into metals and disappointing data from China later in the year could provoke sharp falls.
LME COPPER: Benchmark copper on the London Metal Exchange was up 1.1 percent at $6,844.50 a tonne at 1025 GMT after touching $6,872, the highest since September 2014.
CHINA FACTORIES: China's manufacturing growth unexpectedly accelerated in August, suggesting its economy is expanding strongly despite rising financing costs and a cooling housing market.
U.S. ECONOMY: Data showed U.S. second-quarter growth was the highest in more than two years, while private-sector employment saw the biggest increase in five months in August.
SPECULATORS: Brokers Marex Spectron said the net speculative long position in copper rose to 43 percent of open interest as of Friday, the most since 2004.
SUPPLY: However, supply issues that helped drive prices higher this year faded as output in Chile, the world's biggest copper producer, increased in July and Indonesia agreed to allow Freeport-McMoRan Inc to keep operating its giant Grasberg copper mine.
CHINA STEEL: Chinese rebar steel and iron ore futures gained after the manufacturing data, continuing a months-long rally that has boosted other industrial metals, particularly stainless steel ingredient nickel and galvanizing agent zinc.
NICKEL/ZINC: Benchmark nickel was up 1 percent at $11,700 a tonne and on track for a 14.5 percent rise in August, the most since April 2014. Zinc was 1.3 percent higher at $3,135 and up 12.2 percent in August, the most since April 2015.
ALUMINIUM: Aluminium was up 2.3 percent at $2,136 after hitting $2,139, the highest since February 2013. It was set to end the month 11.3 percent higher, the biggest monthly rise since September 2010.
SUPPLY: Capacity cuts in China have driven prices higher, but Chinese producers are likely to ramp up production with prices at this level, ING's Patterson said.
DOLLAR: The dollar strengthened slightly in August, ending a run of weakness that has helped metals by making them cheaper for holders of other currencies.
PRICES: Lead was 0.9 percent higher at $2,392 and tin was down 0.1 percent at $20,580.
(Additional reporting by Melanie Burton; Editing by Dale Hudson)