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METALS-London copper hits one-week top on steady China demand

(Adds comment, updates prices) MELBOURNE, April 3 (Reuters) - London copper climbed to the highest level in more than a week on Tuesday, supported by stronger-than-expected manufacturing growth in top metals user China. China's large state-owned manufacturers returned a solid report card for March as authorities lifted winter pollution restrictions and steel mills cranked up output with construction activity swinging back into high gear. The picture was not quite as rosy among smaller to mid-size Chinese companies, where manufacturing activity expanded at its weakest pace in four months as export demand faltered.

The London Metal Exchange was closed on Friday and Monday for the Easter holiday. Investor worries over a tit-for-tat trade spat between the United States and China were likely to fade out, INTL FCStone said in a monthly report. "Over the course of April, we think investors will come to the conclusion that the trade issue is going to be a protracted and complicated affair and will likely be "defanged," it said. Metals traded on the London Metal Exchange will likely strengthen in the second quarter when seasonal demand is strongest, the brokerage said.

FUNDAMENTALS

* London Metal Exchange copper jumped 1.1 percent to $6,790 a tonne at 0745 GMT, having peaked at $6,828, its highest since March 22. Prices clawed their way back above the 200-day moving average, saving them from coming under further technical selling pressure.

* Shanghai Futures Exchange copper rose 0.2 percent to 50,370 yuan ($8,016) a tonne.

* CHINA TARIFFS: China has increased tariffs by up to 25 percent on 128 U.S. products, from frozen pork and wine to certain fruits and nuts, escalating a dispute between the world's biggest economies in response to U.S. duties on imports of aluminum and steel.

* U.S. ECONOMY: U.S. factory activity slowed in March amid shortages of skilled workers and rising capacity constraints, but growth in the manufacturing sector remains underpinned by strong domestic and global economies.

* COPPER SUPPLY: In a signal of plentiful copper mine supply, China's top copper smelters on Friday lowered their floor treatment and refining charges (TC/RCs) for copper concentrate by 10.3 percent for the second quarter of 2018.

* SUMITOMO METAL OUTPUT: Sumitomo Metal Mining Co Ltd , Japan's second-largest copper smelter, said it planned to increase its refined copper output in the financial year that started on April 1 by 4.6 percent from a year earlier.

* CODELCO OUTPUT: Chile's state copper company, Codelco , produced 1.734 million tonnes of copper in 2017, its second highest output, despite persistently low ore grades at its aging mines.

* FREEPORT: An Indonesian soldier was shot dead and two separatist rebels killed in clashes with security forces near the giant Grasberg copper mine in Papua operated by Freeport McMoRan Inc FCX.N, an Indonesian military spokesman said on Tuesday. PRICES

BASE METALS PRICES 0642 GMT Three month LME copper 6788 Most active ShFE copper 50360 Three month LME aluminium 2019 Most active ShFE aluminium 14080 Three month LME zinc 3266.5 Most active ShFE zinc 24765 Three month LME lead 2384.5 Most active ShFE lead 18700 Three month LME nickel 13515 Most active ShFE nickel 100790 Three month LME tin 21350 Most active ShFE tin 145400

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 744.27 LME/SHFE ALUMINIUM LMESHFALc3 -622.53 LME/SHFE ZINC LMESHFZNc3 336.19 LME/SHFE LEAD LMESHFPBc3 152.36 LME/SHFE NICKEL LMESHFNIc3 308.45

($1 = 6.2839 Chinese yuan renminbi)

(Reporting by Melanie Burton Editing by Manolo Serapio Jr.)