METALS-Copper prices edge up for second session as dollar retreats

MANILA, May 17 (Reuters) - London copper futures rose for a second session on Thursday, spurred by a retreat in the U.S. dollar from a five-month high against a basket of major currencies. Three-month copper on the London Metal Exchange was up 0.5 percent at $6,859 a tonne by 0219 GMT.

FUNDAMENTALS

* DOLLAR: The greenback was trading at 93.157 against a group of major currencies, below Wednesday's peak of 93.632, its highest since Dec. 19, making dollar-denominated assets cheaper for holders of other currencies.

* COPPER MARKET TIGHTENING: ANZ analysts said in a note that the copper market appeared to be tightening, with the front-end of the curve moving into backwardation, when prices for future delivery are lower than those for immediate dispatch. The one-day spread on tomorrow's contracts, or tom-next spread, stood at $50 per tonne. "This appears to be creating a short squeeze, with many traders forced to buy back short positions," ANZ said.

* SHANGHAI COPPER: The most-traded July copper contract on the Shanghai Futures Exchange edged up 0.5 percent to 51,180 yuan ($8,053) a tonne.

* CHINA DATA: Foreign direct investment into China in April fell 1.1 percent year-on-year to 59.24 billion yuan ($9.31 billion), China's Ministry of Commerce said.

* CHALCO: Aluminum Corp of China Ltd, or Chalco, plans to export 30,000-50,000 tonnes of alumina in May, the company's president said.

* U.S.-CHINA: The United States and China launch trade talks on Thursday in a bid to avert a damaging tariff war, with the White House's harshest China critic relegated to a supporting role, senior Trump administration officials said.

* ASIAN SHARES: Asian equities held steady, while the euro struggled near five-month lows set a day earlier following a report that Italian populist parties trying to form a coalition could ask the European Central Bank to forgive 250 billion euros of debt. DATA AHEAD (GMT)

0900 Euro zone Eurostat trade Mar 1230 U.S. Weekly jobless claims 1230 U.S. Philly Fed business index May BASE METALS PRICES 0219 GMT Three month LME copper 6859 Most active ShFE copper 51180 Three month LME aluminium 2328 Most active ShFE aluminium 14880 Three month LME zinc 3088 Most active ShFE zinc 23835 Three month LME lead 2342 Most active ShFE lead 19365 Three month LME nickel 14530 Most active ShFE nickel 107980 Three month LME tin 20865 Most active ShFE tin 146040

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 393.73 LME/SHFE ALUMINIUM LMESHFALc3 -2330.31 LME/SHFE ZINC LMESHFZNc3 523.42 LME/SHFE LEAD LMESHFPBc3 535 LME/SHFE NICKEL LMESHFNIc3 -1593.07

($1 = 6.3557 Chinese yuan)

(Reporting by Manolo Serapio Jr. Editing by Joseph Radford)