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METALS--London copper rises from two-month low, eyes Lunar New Year

(Adds trader comment; updates prices) MELBOURNE, Feb 12 (Reuters) - London copper rose from its lowest in nearly two months on Monday as the dollar dropped, although traders remained cautious about demand after the Lunar New Year holiday that starts this week. Chinese demand for metals and supply constraints should be supportive in 2018, while recent price strength looks to be a function of global growth and demand, said Citi in a report. "(However) while we expect housing-related metals demand to stay fairly robust, potential slowdown of power infrastructure and machinery spending appears worrisome," it said.

FUNDAMENTALS

* LME COPPER: London Metal Exchange copper rose 1.6 percent to $6,863 a tonne by 0730 GMT, recouping losses from the previous session when it fell 1.3 percent to $6,733 a tonne, the lowest since Dec. 14. Prices also crashed through the 100-day moving average, worsening copper's chart picture.

* SHFE COPPER: Shanghai Futures Exchange copper closed down 0.2 percent at 51,710 yuan ($8,202.47) a tonne, having hit its weakest since late September amid a decline in China's metals markets ahead of the Lunar New Year. Open interest is at the highest in nearly two years.

* HOLIDAYS: The Shanghai Futures Exchange will close from the evening of Feb. 14. "The physical market is pretty quiet now leading up to (Lunar New Year). Premiums, onshore and offshore, aren't high by any means," one Shanghai-based copper trader said, expecting more positive sentiment after the holidays due to perceived tightness later in the year.

* DEMAND: U.S. President Donald Trump will roll out an infrastructure plan on Monday that already faces significant hurdles in Congress because it does not offer as much new federal funding as Democrats want or directly address how to pay for the effort.

* U.S. ECONOMY: A surprise surge in U.S. wage growth has rocked global stock and bond markets in the past week, and inflation figures from three of the world's biggest economies could dictate whether investors are in for another roller coaster ride in the coming week.

* INVESTORS: Hedge funds and money managers cut their net long position in COMEX copper in the week to Feb. 6, U.S. Commodity Futures Trading Commission data showed on Friday.

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MARKETS NEWS

* Asian equities found a semblance of calm on Monday, with most markets rising, as S&P futures extended their bounce, though global investors were still fretting about the risks from looming U.S. inflation data after last week's sharp sell-off.

PRICES

BASE METALS PRICES 0730 GMT Three month LME copper 6863 Most active ShFE copper 51710 Three month LME aluminum 2136 Most active ShFE aluminum 14315 Three month LME zinc 3395.5 Most active ShFE zinc 25940 Three month LME lead 2515.5 Most active ShFE lead 19030 Three month LME nickel 13075 Most active ShFE nickel 99810 Three month LME tin 21135 Most active ShFE tin 146300

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 1289.2 LME/SHFE ALUMINIUM LMESHFALc3 -1247.86 LME/SHFE ZINC LMESHFZNc3 596.79 LME/SHFE LEAD LMESHFPBc3 -91.78 LME/SHFE NICKEL LMESHFNIc3 2346.97

($1 = 6.3042 Chinese yuan renminbi)

(Reporting by Melanie Burton; additional reporting by Tom Daly in BEIJING; Editing by Richard Pullin and Christian Schmollinger)