* Discount for cash over 3-month copper contract narrows
* Alumina prices help fuel aluminium's climb to 2-month high (Updates with closing prices, adds comment)By Pratima DesaiLONDON, Aug 29 (Reuters) - Copper prices eased on Wednesdaydue to worries about demand in top consumer China after a stateplanning official said there were increasing risks to growth inthe second half of the year.Benchmark copper on the London Metal Exchange endeddown one percent at $6,086 a tonne. It touched a two-week highof $6,167 a tonne on Tuesday."The warning about Chinese growth spooked the market and ontop of that the dollar is up," a copper trader said, adding thatmanufacturing surveys for China due later this week couldtrigger volatility.
GOALS: The head of China's National Development and ReformCommission said the government needed to step up efforts toachieve key development goals. TRADE: Amid an escalating trade dispute with Washington,China's economy showed signs of further cooling last month with
investment growth at a record low and consumers turning morecautious about spending. DOLLAR: A higher U.S. currency makes dollar-denominatedcommodities more expensive for non-U.S. firms, potentiallydampening demand. It is also a relationship used by funds togenerate buy and sell signals using numerical models. PMI: China's official Purchasing Managers' Index (PMI) dueon Friday is expected to show a reading at 51 from 51.2 in July,according to a Reuters poll.STOCKS: Cancelled warrants or metal earmarked for deliveryin warehouses registered with the LME have surged to a one-yearhigh above 132,200 tonnes, nearly 50 percent of the total at267,850 tonnes. Cancelled warrants on Aug. 16 were below 25,000 tonnes.SHFE ARBITRAGE: Traders say the cancelled metal is headingfor China as prices on the Shanghai Futures Exchange at around$7,150 a tonne are much higher than on the LME and thegap is wide enough to cover shipping, taxes and make a profit.SPREADS: Worries about shortages on the LME market have seenthe discount for the cash over the three-month contract narrowto $12 a tonne from $42 a tonne on Aug. 15. CHINA ALUMINA: China is shipping unusually high volumes ofalumina for a second time this year to an international marketdesperate for the ingredient used to make aluminium, traders andanalysts said, even as domestic prices rise and put pressure onsmelters. ALUMINIUM: Rising input costs such as alumina and energyhelped the aluminium price hit a two-month high of$2,178 a tonne earlier. It ended up 1.8 percent at $2,172."Technicals are pointing to a possible breakout shouldprices take out $2,147 on a two-day closing basis and a furtheradvance to $2,200 cannot be ruled out," said INTL FCStoneanalyst Edward Meir.PRICES: Zinc fell 1.1 percent to $2,512, lead added 0.2 percent to $2,087, tin eased 0.6percent to $18,940 and nickel slid 1.3 percent to$13,500 a tonne.<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top base and precious metals analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Pratima Desai; Additional reporting by ManoloSerapio Jr.; Editing by David Evans, Mark Potter and KirstenDonovan)