* LME copper stocks up by nearly two thirds this month
* BHP mulls contract workers to break Escondida strike
* GRAPHIC-2017 metal returns: tmsnrt.rs/2eqHKkL (Updates with closing prices)
By Jan Harvey
LONDON, March 9 (Reuters) - Copper fell to a two-month low on Thursday, reflecting losses across the industrial metals and other assets as markets geared up for an expected hike in U.S. interest rates this month.
Another large build in London Metal Exchange (LME) copper stocks and news from Chile that BHP Billiton was mulling bringing in temporary workers to ease the effects of a strike at its Escondida copper mine also pressured prices.
Three-month copper on the LME closed at $5,690, down 1.4 percent, having earlier touched its lowest since Jan. 10 at $5,652.
The metal hit a 21-month high of $6,204 last month after news of strike action at Escondida and an export stoppage at Freeport-McMoRan's Grasberg facility in Indonesia, the world's second-largest copper mine.
Copper has slipped sharply in the past week, however, as bets on a March U.S. rate increase grew, driving up the dollar and weighing on assets priced in the currency.
"Everyone's betting that a Fed rate hike will take place. That's what's keeping base metals prices currently very low," ABN Amro analyst Casper Burgering said. "You can see that among all the base metals, including copper, aluminium and zinc."
Bets on a Fed move on rates this month grew after data on Wednesday showed U.S. private sector job growth registered its biggest increase in more than a year in February, suggesting the economy remains on solid ground.
Global shares have posted their longest losing streak in more than a year as interest rate expectations sent the dollar and bond yields higher.
The dollar hit a three-week high against the yen, though it later fell against a currency basket after remarks from the European Central Bank boosted the euro.
Copper stocks in LME-registered warehouses MCU-STOCKS rose a further 38,775 tonnes on Wednesday, exchange data showed. They have increased 126,575 tonnes, or 64 percent, this month.
"This does bear out suspicions that there are stockpiles that will come out at the right price," said Capital Economics analyst Caroline Bain.
LME zinc, which succumbed to technical selling after breaking its 100-day moving average at $2,673, closed 1.1 percent down at $2,681 a tonne, while lead ended the day flat at $2,250.50.
Aluminium closed 0.5 percent down at $1,868, while nickel also lost 0.5 percent to close at $10,150 and tin slipped by 0.6 percent to $19,255.
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
Additional reporting by Melanie Burton in Melbourne; Editing by David Goodman and Mark Potter