* LME, Shanghai stocks rise off lows
* Investors mindful of expected copper market surplus
* Aluminium set for further gains - Japan industry body (Updates with closing prices)
By Maytaal Angel
LONDON, July 11 Copper dipped on Friday as investors eyed rising warehouse stocks and reassessed whether the metal, already trading near 4-1/2 month highs, was likely to extend gains, especially as it is due to move into surplus at some point this year.
Copper inventories in Shanghai Futures Exchange warehouses rose 3.8 percent from last Friday to 84,453 tonnes, their highest in about a month CU-STX-SGH, data out earlier showed. London Metal Exchange copper stocks rose 375 tonnes to 158,475 tonnes, near their highest since mid June MCU-STOCKS.
Overall though, LME stocks are near their lowest in nearly six years.
"The key question is whether the turnaround in inventories is the beginning of a new uptrend. Our best guess is we may be seeing the beginning of a longer term shift," said Nic Brown, head of commodities research at Natixis.
"We think the copper market is heading for a period of surplus, stocks are going to accumulate in warehouses and we're going to see another (price) downleg between now and the beginning of next year."
Three-month copper on the London Metal Exchange closed 0.1 percent lower at $7,156 a tonne, drifting below a 4-1/2 month high of $7,212 reached earlier this week.
Signs of global economic recovery have gathered pace following last week's strong U.S. jobs data and factory numbers from China that reinforced expectations of a pickup in demand for industrial metals.
But risks abound in Europe's banking sector, even if investors have been temporarily reassured that problems at Portugal's biggest listed bank are unlikely to engulf the wider EU banking sector.
In addition, Thursday's data from China, the world's biggest copper consumer, showed its trade performance improved in June but missed market forecasts, suggesting Beijing will have to deploy more stimulus measures to stabilise the economy.
"We are now seeing signs of seasonal slowing down in key metals consuming sectors. The market might take a breather for a while," said Andrew Shaw, head of base metals research at Credit Suisse in Singapore.
China's copper imports fell in June to their lowest since April 2013 as banks reduced lending for metals imports following a probe into alleged fraudulent metals financing at Qingdao port.
In industry news, Standard Bank Plc said it has a total exposure related to China's Qingdao port of about $170 million worth of aluminium, and has started legal proceedings in Shandong province to protect its position.
Aluminium ended 0.8 percent higher at $1,941 a tonne.
Prices for aluminium could climb around a third to as high as $2,500 per tonne if more U.S. automakers start producing vehicles made from the metal, said the new head of Japan's aluminium industry body.
Tin closed up 0.2 percent at $22,075 a tonne, having earlier dropped to a two-week low of $21,865 and lead ended 0.8 percent higher at $2,206.
Nickel ended 0.7 percent higher at $19,380.
Zinc, untraded at the close, was bid at $2,303, up 1.4 percent.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin ($1 = 6.2054 Yuan) (Additional reporting by Naveen Thukral, editing by David Evans and Keiron Henderson)