METALS-Copper, aluminium slip from multi-year highs on profit-taking

* LME/ShFE arb: (Updates with closing prices)

LONDON, Aug 17 (Reuters) - Aluminium, copper and other base metals edged down from multi-year peaks on Thursday as some investors locked in profits from a steep rally amid doubts about future demand in top metals consumer China.

Speculators have largely fuelled a rally on the London Metal Exchange that has seen the index of six LME industrial metals climb 16 percent from early June to Wednesday’s close.

“There’s a lot of investor optimism at the moment, which in our view will be disappointed,” said Caroline Bain, chief commodities economist at Capital Economics in London.

“Chinese policy was being tightened during the first half, and we expect it will come through (in weaker data) over the next few months. Some of the exuberance, some of the price rises fuelled by investor buying could be dampened.”

Chinese economic data for August could be the trigger for a correction, she added.

Also weighing on metals markets as well as European shares on Thursday were minutes from the U.S. Federal Reserve, released on Wednesday evening, in which policymakers voiced concern over weak U.S. inflation, clouding the outlook for the world’s largest economy.

* LME COPPER: LME benchmark copper closed down 0.6 percent at $6,490 a tonne after advancing to its highest since Nov. 27, 2014 at $6,580. Copper, which rose 2.4 percent on Wednesday, is up about 18 percent so far this year.

* COPPER STOCKS: Prices were supported as LME inventories continued to fall MCUSTX-TOTAL. On-warrant stocks - those not earmarked for delivery and therefore available to investors - have slid 46 percent over the past month.

* COPPER BALANCE: Despite the fall in inventories, consultancy Wood Mackenzie expects the global copper market to be largely balanced between supply and demand this year, said analyst Paul Benjamin. “It is hard to justify the current run up in the price from a fundamental perspective,” he told the Reuters Global Base Metals Forum.

* ALUMINIUM: LME aluminium finished down 0.9 percent at $2,076 a tonne after climbing to $2,112, its highest since Sept. 8, 2014.

* ZINC: LME zinc shed 1.8 percent to end at $3,062 after hitting its highest since Oct. 16, 2007 at $3,147 a tonne.

* CHINESE ZINC: Chinese zinc output fell 6.3 percent year-on-year in July to 476,000 tonnes. “This was the lowest output level on a daily basis (15,400 tons) in over three years ... This is clearly giving rise to concerns about supply bottlenecks,” Commerzbank said in a note.

ZINC STOCKS: LME zinc inventories MZNSTX-TOTAL have tumbled 42 percent this year to the lowest levels since December 2008.

* PRICES: LME lead slid 4.1 percent to close at $2,413.50, the biggest one-day loss since mid-April, nickel lost 0.3 percent at $10,725 while tin bucked the weaker trend, gaining 0.9 percent to $20,200.

Additional reporting by Melanie Burton in Melbourne; Editing by Dale Hudson and David Evans