(Adds analyst comment, updates prices)

March 17 (Reuters) - Copper dipped on Tuesday as Iran

launched fresh attacks on U.S. allies in the Gulf and London

Metal Exchange inventories climbed to their highest in 6-1/2

years, while aluminium was lifted by concerns over supply from

the Middle East.

Benchmark LME three-month copper was down 0.8% to

$12,748.50 per metric ton as of 1015 GMT, after gaining 0.6% in

the previous session, which was interrupted by a nearly

three-hour technical halt.

The war in the Gulf saw no sign of an end, as Israel said it had

killed Iran's security chief in airstrikes overnight and Tehran

kept up attacks against neighbours that have pushed up energy

prices, stoking inflation and growth fears.

Copper stocks in LME warehouses rose to 330,375

tons, the most since late August 2019, following 13,500 tons of

inflows into Kaohsiung and a further 4,900 tons into Baltimore.

The cash LME copper contract was at a steep $102 a ton

discount to the three-month forward , indicating no

shortage of metal.

"I would basically conclude that copper is actually doing

extremely well considering the contango we have in the London

market ... the elevated level of inventories," said Ole Hansen,

head of commodity strategy at Saxo Bank.

"We need to see some of these stockpiles being brought

down. As we're having a prolonged conflict, that may impact the

demand," he added.

The dollar strengthened, making greenback-denominated

commodities more expensive for traders using other currencies.

The Federal Reserve is expected to keep rates steady on

Wednesday.

Aluminium rose 0.9% to $3,423.50 a ton as top bauxite

producer Guinea considers introducing export quotas for mining

firms as early as this month, while the conflict in the Middle

East kept traders concerned over supply of metal.

Zinc dropped 1.6% to $3,216 as 21,625 tons of

deliveries into Singapore took LME zinc stocks to

their highest since July.

Lead rose 1.1% to $1,925, nickel lost 0.4%

to $17,390 and tin slid 3.5% to $46,560.