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By Melanie Burton
MELBOURNE, April 11 (Reuters) - London copper climbed on Monday from near its lowest in more than a month as the dollar softened and weaker inflation fuelled hopes China’s monetary authorities may release more stimulus.
Data on Monday showed China’s consumer price inflation rose less than expected in March, flattening out after a four-month strengthening trend, but wholesale prices continued to show a deflationary trend.
A softer dollar also cushioned prices of copper and other commodities after a fall in U.S. wholesale inventories pointed to a sharper-than-expected slowdown in first-quarter economic growth. A weaker dollar makes commodities cheaper for buyers holding other currencies.
The dollar looked set to remain weak for some time, broadly offering support for commodities, as U.S. monetary officials seek to make their exports more competitive, said Jonathan Barratt, chief investment officer of Ayers Alliance in Sydney.
“(Also) the numbers are broadly suggesting an improvement in China economic growth and that will create more demand,” Barratt said. This would help work through an overhang in Chinese copper stocks that has dampened sentiment towards metals.
He expected copper to trade in a $4,500-$5,000 band over the coming months.
Three-month copper on the London Metal Exchange climbed 0.4 percent to $4,668 a tonne by 0717 GMT, after closing the previous session little changed but logging a 3.8 percent weekly loss, its biggest since the first week of January. Copper fell last week to it lowest since Feb. 26.
Shanghai Futures Exchange copper edged down 0.1 percent to 35,830 yuan ($5,538) a tonne, but remains near two-month lows.
“Some (investors) are bearish, worried about exports of copper stockpiles in China to elsewhere, and there’s already some signs of stocks reshuffling from Shanghai to LME,” analyst Helen Lau of Argonaut Securities in Hong Kong told Reuters.
ShFE copper inventories fell last week, while LME inventories in Asia, particularly Singapore and South Korea, rose. CU-STX-SGH
China’s economic indicators showed signs of improvement in the first quarter but a sluggish world economy and volatile markets deprive the changes of a solid basis, state television quoted Premier Li Keqiang as saying on Friday.
Industrial production and economic growth reports are due on Friday, with analysts looking for further signs that the world’s second-largest economy may be stabilising.
Hedge funds and money managers sharply cut their bullish position in COMEX copper contracts to a five-week low in the week to April 5, government data showed on Friday.
Elsewhere, top U.S. aluminium maker Alcoa is due to report on Monday.
In other metals, ShFE tin jumped by 2.8 percent to 109,060 while ShFE nickel rose by 1.6 percent to 68,230.
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
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
$1 = 6.4700 Chinese yuan Reporting by Melanie Burton; Editing by Richard Pullin and Sunil Nair