METALS--Nickel retreats from six-week peak on profit taking

* GRAPHIC-Top base and precious metals analystis - GFMS: (Adds technical comment on copper, updates prices)

LONDON, June 1 (Reuters) - Nickel pulled back on Friday from a six-week peak, as investors took profits after a rally driven by production cuts in China, falling inventories and higher steel prices.

Benchmark nickel on the London Metal Exchange, which has gained 12 percent over the past month, was up 0.1 percent at $15,235 a tonne by 1430 GMT after touching $15,690, the highest since April 19.

Open interest in LME nickel was at its highest since January 2015.

"You've seen a huge rally, particularly on the Shanghai side. What's really important is to keep an eye on profit taking," said Oliver Nugent, commodities strategist at ING Bank in Amsterdam.

"Even though the bulls are chasing it now, we think there's got to be a demand hit from the stainless steel side of things."

High grade nickel traded on the LME is about $1,000 per tonne more expensive than nickel pig iron, an iron-rich feed for stainless steel plants, which will drive switching to the cheaper material, Nugent added.

The bulk of nickel is used to make stainless steel.

In the near term, however, nickel got a boost when an official at Shandong Xinhai Technology Co confirmed on Friday the company had been told to reduce output of nickel pig iron.

* SHFE NICKEL: The most-traded nickel contract on the Shanghai Futures Exchange rose as much as 5.5 percent to 120,000 yuan ($18,701.78) a tonne, a new three-year high. The contract notched up a weekly gain of 6.2 percent, its biggest since the week ended Jan. 26.

* REBAR: Nickel was also bolstered as Shanghai steel rebar prices rose to their highest in nearly three months on Friday.

* CHINA DATA: Metals got support from a private survey that showed China's manufacturing sector expanded at a steady pace in May.

* TARIFFS: Canada, Mexico and the European Union retaliated against U.S. tariffs on steel and aluminium with levies on billions of dollars of U.S. goods.

* ALUMINIUM: The news on tariffs failed to boost LME aluminium, which fell 1.1 percent to trade at $2,268 a tonne, partly because the market expected that a deal would be concluded with big aluminium exporter Canada, analysts said.

* COPPER: LME copper added 0.3 percent to $6,875 a tonne. The price appears to be consolidating head of the June options expiry next Wednesday "where a lot of upside open interest is to roll off", said Alastair Munro at broker Marex Spectron.

"Short term, it is has breached below an ascending trend and could revisit $6,710/$6,668 with next support at $6,597," Stéphanie Aymes, head of technical analysis at Societe Generale, said in a note.

* PRICES: LME zinc traded down 0.7 percent at $3,079 a tonne, lead dropped 1.1 percent to $2,433 and tin added 0.2 percent to $20,645.

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(Additional reporting by Tom Daly in Beijing Editing by Susan Fenton and Jane Merriman)