METALS-Copper slips as dollar edges up ahead of Fed testimony

* Fed's Powell to testify before Congress at 1500 GMT

* LME/ShFE arb: http://bit.ly/2wZSAEz

* GRAPHIC-2018 asset returns: http://tmsnrt.rs/2jvdmXl (Updates prices)

LONDON, Feb 27 (Reuters) - Copper fell on Tuesday as the dollar edged higher ahead of incoming Federal Reserve Chair Jerome Powell's debut testimony before Congress, weighing on assets priced in the U.S. currency.

Powell's testimony, due to take place at 1500 GMT, will be closely watched for clues on the outlook for U.S. monetary policy, with many investors nervous about the Fed's policy normalisation following years of stimulus.

"The big item on the calendar today is the Fed speech coming later on, so you have a bit of nervousness around the dollar," ING analyst Oliver Nugent said.

But he said the market was lacking direction overall, adding: "There has been no strong momentum coming out of China."

The dollar was up 0.2 percent against a basket of currencies.

London copper has held above the $7,000 a tonne mark since Feb. 14 and edged up on Monday on the back of strong import data from top metals consumer China.

ICBC Standard Bank said in a note on Tuesday it still saw a positive fundamental outlook for base metals, forecasting across the board deficits in 2018 and through to 2020.

* COPPER PRICES: London Metal Exchange copper was down 0.9 percent at $7,049 a tonne at 1415 GMT.

* COPPER SPREADS: The discount for cash over three-month copper <CMCU0-3> contracted to its narrowest in six weeks on Tuesday at $32.25, from $42.25 a week ago.

* COPPER TECHNICALS: A break below $7,079 in LME copper could establish a bearish target at $7,003.50, Reuters technical analyst Wang Tao said.

* ALUMINIUM PRICES: LME aluminium was up 0.3 percent at $2,145 a tonne.

* ALUMINIUM SPREADS: Nearby aluminium spreads are under intense pressure, reflecting tightness in short-dated supply. The cost to roll aluminium for a day <CMALT-O> hit its highest since late 2016 on Monday at $11 and remains highly elevated at $10 a tonne.

* ALUMINIUM STOCKS: On-warrant aluminium stocks, or those not earmarked for delivery, in London Metal Exchange warehouses <MALSTX-TOTAL> fell by 23,425 tonnes to 1,085,175 tonnes, exchange data showed, pulling back from a recent 11-month high.

* OTHER METALS: LME zinc was down 0.9 percent at $3,498 a tonne, while lead was 0.1 percent lower at $2,576 a tonne, tin was up 0.2 percent at $21,640 and nickel was down 0.1 percent at $13,915 a tonne.

(Additional reporting by Melanie Burton in Melbourne and Tom Daly in Beijing Editing by Louise Heavens and Edmund Blair)