* LME/ShFE arb:
* Funds still short copper
* Support near May lows near $6,710-6,720 (Adds closing prices)By Pratima DesaiLONDON, May 15 (Reuters) - Copper fell on Tuesday underpressure from negative sentiment fuelled by a higher dollar andrising inventories, though upbeat industrial production datafrom China offered some support.Benchmark copper on the London Metal Exchange endeddown 1.1 percent at $6,808 a tonne."A lot of what is going on in base (metals) is related tothe dollar," said Peter Fertig, analyst at QuantitativeCommodity Research.
"China's economy is in good shape, industrial production isstrong and its lending figures are a positive for theconstruction and housing market."
DOLLAR: A higher U.S. currency makes dollar-denominatedmetals more expensive for holders of other currencies, whichcould dent demand. INDUSTRY: China's industrial output rose 7 percent in April,above forecasts for a 6.3 percent increase and up from aseven-month low of 6 percent in March. LOANS: Chinese banks extended 1.18 trillion yuan ($185.5billion) in net new yuan loans in April. The forecast was for1.1 trillion yuan compared with March's 1.12 trillion yuan. PROPERTY: "As China dominates demand for most metals, itsmonthly update on the economy is watched closely, in particularwith regard to the metals-intensive infrastructure and propertysectors," Julius Baer analysts said in a note.TECHNICALS: A sustained break above $6,890, where the 21-daymoving average currently sits, could see a move towards $6,970,
the 100-day moving average. Support at $6,710-$6,720 comes fromthe lows seen earlier this month.INVENTORIES: Stocks of copper in LME-approved warehouses areat 291,350 tonnes, up nearly 10,000 tonnes since last Thursday.Copper stocks in warehouses monitored by the Shanghai FuturesExchange are at nearly 280,000 tonnes, compared with close to250,000 at the end of April.POSITIONING: Traders said many funds are still short copper."Having registered a net speculative short of 2.7 percent ofopen interest on May 8, a level not seen since Sept. 2016,positioning in copper is now a net speculative short of 1.8percent of open interest, or 3,300 lots (of 25 tonnes each),"Marex Spectron said.PRICES: Aluminium closed 0.4 percent up at $2,327 atonne, zinc gained 0.2 percent to $3,062, lead fell 1.6 percent to $2,348, tin was down 0.4 percent at$20,875 and nickel lost 0.5 percent to $14,425.<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top Base and Precious Metals Analysis - GFMS LME/ShFE arb: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by David Goodman and Adrian Croft)