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METALS-Base metals drop in Nov despite signs of China factory growth

(Adds details, updates prices) MELBOURNE, Nov 30 (Reuters) - Base metals declined on Thursday and looked to finish November lower, shrugging off encouraging manufacturing reports from China and Japan as investors locked in profits before year end. Most base metals have corrected this month after prices overshot fundamentals, but are still set for a second year of solid gains as global manufacturing growth recovers following the financial crisis. Nickel prices have dropped 8 percent this month as exuberance over demand from electric vehicles fades while pollution-related production cuts in China have proven less fierce than feared which has sent zinc and aluminum down by around 5 percent. "It could just be a little profit-taking. There's been a bit of an unwind in some of the metals positions in the past month to six weeks," said UBS analyst Lachlan Shaw in Melbourne. "The aluminum long has definitely been unwound as the China winter cuts, which were expected to tighten the market, came through with a bit more wiggle room. The tension there has certainly dissipated."

FUNDAMENTALS

* ALUMINIUM: London Metal Exchange (LME) aluminum slipped as much as 1.2 percent to $2,040 per tonne, its lowest since Aug. 15, before paring losses to 0.4 percent. The metal is set to fall 5 percent in November, its biggest monthly loss since May 2016. This has taken some heat out of the year's 22 percent rally, which is still its biggest since 2009 when prices surged 46 percent. Shanghai Futures Exchange (ShFE) aluminum plunged more than 11 percent this month.

* COPPER: LME copper was flat at $6,758 a tonne, as of 0732 GMT. Earlier in the session, it hit $6,720 a tonne, the weakest since Nov. 17. ShFE copper slipped 0.6 percent to 52,840 yuan ($7,993) a tonne.

* CHINA PMI: Growth in China's manufacturing sector unexpectedly picked up in November, despite a crackdown on air pollution and a cooling property market that have been widely expected to weigh on the world's second-largest economy.

* JAPAN ECONOMY: Japan's industrial output rose less than expected in October, but companies forecast production to rise strongly in November and December as robust overseas demand continues to support factory activity and broader economic growth.

* STRIKES: Workers at Southern Copper Corp in Peru said they completed a ninth day of an indefinite strike on Wednesday.

* STRIKES: A union at Teck Resources' Quebrada Blanca copper mine on Wednesday rejected a contract offer from the Canadian miner, increasing the likelihood of a strike, the union told Reuters.

* MARKETS: Asian shares fell on Thursday, weighed down by a plunge in high-flying tech shares on fears that a long boom in micro-chips may have peaked, while virtual currency bitcoin steadied after a roller-coaster ride in the previous session.

BASE METALS PRICES 0729 GMT Three month LME copper 6758 Most active ShFE copper 52830 Three month LME aluminum 2060.5 Most active ShFE aluminum 14565 Three month LME zinc 3141.5 Most active ShFE zinc 24960 Three month LME lead 2446 Most active ShFE lead 18365 Three month LME nickel 11295 Most active ShFE nickel 91060 Three month LME tin 19450 Most active ShFE tin 141510

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 627.18 LME/SHFE ALUMINIUM LMESHFALc3 -1088.17 LME/SHFE ZINC LMESHFZNc3 321.24 LME/SHFE LEAD LMESHFPBc3 -1123.73 LME/SHFE NICKEL LMESHFNIc3 2114

($1 = 6.6110 Chinese yuan)

(Reporting by Melanie Burton; Editing by Sherry Jacob-Phillips and Christian Schmollinger)