Updates prices at 1600 GMT

By Eric Onstad

LONDON, Aug 29 (Reuters) -Copper and aluminium prices extended losses on Thursday, pressured by rising inventories, lacklustre demand in China and a strong dollar.

Three-month copper CMCU3 on the London Metal Exchange was down 0.2% at $9,247 a metric ton by 1600 GMT after sliding by 2% in the previous session.

Copper inventories in LME-registered warehouses jumped by 8,700 tons to 322,950 tons, LME data showed on Thursday, the highest for about five years and double levels in mid-June. MCUSTX-TOTAL

Most of the recent inflows have been into Asian LME warehouses amid heavy exports from China, analysts say.

"We could see some more deliveries into LME stocks, even into September," said Amelia Xiao Fu, head of commodity market strategy at Bank of China International.

An arbitrage window that encouraged Chinese exports has closed, but the flows were continuing due to delays in permitting and other shipping issues, she added.

LME copper had rebounded by about 9% since touching a 4-1/2 month low on Aug. 5. It reached $9,453 on Tuesday before retreating on Wednesday.

"The upside is limited until we see a more meaningful pick-up in Chinese demand. The data in the property market still remains sluggish and other types of fixed-asset investment have seen only a moderate pick-up," Fu added.

Miner BHP BHP.N downgraded its forecast for China's copper growth to 1-2% this year, it said on Tuesday, pointing to an expected sharp contraction in housing completions this year.

LME aluminium CMAL3 dropped 1.4% to $2,461 a ton, partly pressured by concern about excess supplies as inventories climb in SHFE-approved warehouses.

SHFE aluminium stocks have gained 36% over the past three months. AL-STX-SGH

Also pressuring the metals market was a stronger dollar =USD after better-than-expected U.S. GDP data, making commodities priced in the U.S. currency more expensive for buyers using other currencies.

Among other metals, LME nickel CMNI3 dipped 0.2% to $16,985 a ton, zinc CMZN3 edged down 0.1% to $2,878, lead CMPB3 eased 2.2% to $2,038.50 and tin CMSN3 fell 0.7% to $32,365.

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($1 = 7.1109 Chinese yuan renminbi)

Reporting by Eric Onstad
Additional reporting by Siyi Liu in Beijing
Editing by David Goodman, Kirsten Donovan

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