METALS-Copper gains as dollar drops on fresh U.S. political turmoil

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

* GRAPHIC-2018 asset returns: http://tmsnrt.rs/2jvdmXl (Updates prices, adds detail/quote; changes dateline from BEIJING)

LONDON, March 16 (Reuters) - Copper rose on Friday as investors, betting on strong growth in China, bought the metal while the dollar retreated, though concerns that U.S. policies could provoke a trade war kept gains in check.

The dollar fell to its lowest since early March versus the yen amid reports that U.S. President Donald Trump had decided to remove H.R. McMaster as his national security adviser.

A weaker dollar makes metals cheaper for holders of other currencies.

"The demand data and demand forecasts point to stronger demand, especially in China, so the deficit on the (copper) market is likely to continue this year," said Eugen Weinberg, head of commodities research at Commerzbank.

He added, however: "The question is whether (this deficit) is not already priced in. We think it is. (Also) we expect through the year a somewhat stronger U.S. dollar."

* LME COPPER: Three-month copper on the London Metal Exchange was up 0.4 percent at $6,950 a tonne at 1128 GMT, still set to close the week in negative territory.

* FED MEETING: ANZ said investors "are likely to remain cautious" ahead of next week's Federal Reserve meeting, at which the U.S. central bank is expected to raise interest rates for the first time this year.

* U.S. TURMOIL: The New York Times reported that U.S. Special Counsel Robert Mueller had issued a subpoena for documents, including some concerning Russia, related to President Donald Trump's businesses.

* TRADE WAR: Investors remain concerned the United States is sliding deeper into protectionism, with a report this week that Trump is seeking to impose tariffs on up to $60 billion of Chinese imports.

* OYU TOLGOI: Annual revenue from Mongolia's giant Oyu Tolgoi copper-gold mine fell 22 percent last year, with construction delays leaving it unable to take full advantage of higher prices.

* CODELCO: Chile's state copper miner Codelco posted profits of $2.88 billion in 2017, boosted by rising copper prices even as production costs increased.

* CHINESE COPPER OUTPUT: China's refined copper output in January and February rose 10.3 percent year-on-year to 1.48 million tonnes, data showed on Friday.

* DRC: The Democratic Republic of Congo is considering adding copper to its list of strategic minerals in a move that would extract higher fees from mining companies, an adviser to the prime minister said on Thursday.

* ALUMINIUM INVENTORIES: Deliverable Shanghai Futures Exchange aluminium inventories rose by 87,303 tonnes to a record 934,216 tonnes, data showed on Friday.

(Additional reporting by Tom Daly; Editing by Dale Hudson)