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METALS-London copper edges off 2-wk low as dollar supports

MELBOURNE, Jan 8 (Reuters) - London copper edged away from its lowest in a fortnight on Monday but remained not far from a four-year high, as traders filtered back from holidays and adjusted to a softer dollar and resilient Chinese demand.

FUNDAMENTALS

* London Metal Exchange copper traded at $7,130 a tonne by 0223 GMT, up a modest 0.1 percent from Friday, when prices corrected to the lowest in two weeks at $7,107. Prices on Dec. 28 topped out at $7,312.50 a tonne, the highest since Jan 2014.

* Shanghai Futures Exchange copper traded down 0.9 percent at 54,570 yuan ($8,428) a tonne, having reached the lowest since Dec. 25.

* M&A: Coal and iron ore dominated mining takeovers in 2017, Thomson Reuters data shows, with buyers favouring the heavily polluting devil they know over the uncertainties of a battery-powered future.

* UPCOMING: Data in the week ahead will enable investors to gauge the strength of German and British industry, U.S. spending and Chinese trade at the end of last year - and the first hints on the strength of economic activity at the start of 2018.

* ZINC: LME cash zinc is trading at a $26 premium to the benchmark contract <CMZN0-3> up from a $10 discount on Dec. 12. Traders suggested the backwardation has encouraged deliveries into SHFE warehouses, where stocks have climbed around 10,000 tonnes since late December. <ZN-STX-SGH>

* LEAD: A very big short position holder has emerged in lead futures, at 20-29 pct of outstanding positions for February, rising to 30-39 pct for March <0#LME-FBR>. There is also a significant holder of lead warrants, holding 40-50 pct of LME stocks, which suggests an impending tussle <0#LME-WHL>.

* U.S. INTEREST RATES: Federal Reserve Bank of Cleveland President Loretta Mester said on Friday she expects roughly four interest-rate hikes this year, as U.S. economic growth picks up and unemployment remains low.

* U.S. ECONOMY: New orders for U.S.-made goods increased in November, but business spending on equipment appeared to be cooling after robust growth in 2017.

* CHINA PAYMENTS: China will encourage companies to increase their use of yuan for settling cross-border trade deals.

* CHINA ECONOMY: A blizzard of data in coming weeks is expected to show China's economy ended a strong 2017 on a slightly softer note, but activity has likely remained more resilient than expected despite a punishing crackdown on industrial pollution and a cooling property market.

* MARKETS: Asian shares neared all-time peaks on Monday after Wall Street boasted its best start to a year in over a decade, with brisk economic growth and benign inflation proving a potent cocktail for risk appetite.

DATA/EVENTS 0700 Germany factory orders 1000 Eurozone consumer confidence, retail sales PRICES

BASE METALS PRICES 0130 GMT Three month LME copper 7143 Most active ShFE copper 54550 Three month LME aluminium 2205 Most active ShFE aluminium 14920 Three month LME zinc 3350 Most active ShFE zinc 25935 Three month LME lead 2555 Most active ShFE lead 19380 Three month LME nickel 12490 Most active ShFE nickel 97990 Three month LME tin 19965 Most active ShFE tin 145200

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 423.8 LME/SHFE ALUMINIUM LMESHFALc3 -1618.31 LME/SHFE ZINC LMESHFZNc3 237.92 LME/SHFE LEAD LMESHFPBc3 -644.21 LME/SHFE NICKEL LMESHFNIc3 2021.42

($1 = 6.4751 Chinese yuan)

(Reporting by Melanie Burton; Editing by Biju Dwarakanath)