* LME/ShFE arb: bit.ly/2wZSAEz
* GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl (Updates with closing prices)
By Eric Onstad
LONDON, March 1 (Reuters) - Lead prices touched their lowest in 2-1/2 months on Thursday, with other industrial metals also under pressure from a stronger dollar and general risk aversion that also hit global equities.
"Metals are following the macro trends, especially the U.S. dollar and U.S. equity markets, and mostly ignoring the micro elements, which remain pretty supportive," said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.
World stock markets fell for a third day running, while the dollar rose to six-week highs against a basket of currencies , although the dollar gave up much of its gains late in the European session after U.S. Federal Reserve chief Jerome Powell said there was no evidence the U.S. economy was overheating.
A stronger dollar makes metals more expensive for holders of other currencies.
"This sell-off is healthy, reducing the length in the market, which was pretty extreme. We're a small short on the market, but we think the downside will be limited," Torlizzi added.
The downtrend is likely to last for another week or so and there would soon be opportunities to go long again, he said.
* LEAD: Benchmark lead on the London Metal Exchange closed down 2.3 percent at $2,445 a tonne, its weakest since Dec. 11. Lead was the biggest LME faller on Wednesday, retreating by 2.9 percent after LME inventories jumped by 12 percent.
* CHINA: The market largely shrugged off positive data from the private Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) for February, which beat expectations to reach its highest in six months. A day earlier China's official factory activity reading raised concerns of a sharper than expected slowdown.
"We continue to think that both PMIs are overstating the strength of the economy," Caroline Bain, chief commodities economist at Capital Economics, said in a note.
"We expect prices to drop back further as economic growth slows in response to tighter credit conditions."
* NICKEL: LME nickel slipped by 2.3 percent to finish at $13,475 a tonne. "A stainless steel inventory overhang contributes to bearish (Chinese) onshore sentiment," Marex Spectron's Alastair Munro said in a note.
* ALUMINIUM: Three-month aluminium was one of two LME metals in positive territory, rising 0.7 percent to $2,147 a tonne, after a Brazilian court ordered Norway's Norsk Hydro to cut output from its Alunorte alumina refinery by 50 percent and to halt operations at a bauxite residue disposal facility.
"The order from the regional court ... increases the likelihood that operations at Alunorte will not resume to full capacity in the very near term and might drag out for several weeks," Berenberg's Charlie Clark said in a note.
PRICES: LME copper dipped 0.1 percent to close at$6,922 a tonne, its lowest since Feb. 13. Zinc shed 1.2 percent to end at $3,407 and tin added 0.6 percent to $21,655.
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Additional reporting by Tom Daly in Beijing Editing by David Goodman/Mark Potter/Alexander Smith