Adds analyst comment and dateline, updates prices

By Eric Onstad

LONDON, May 11 (Reuters) - Copper prices advanced to their highest level in more than three months on Monday, as worries about supply shortages outweighed concerns about lower demand due to the stalemate in the Iran war.

Benchmark three-month copper CMCU3 on the London Metal Exchange was up 0.5% at $13,637 a metric ton by 0940 GMT, its strongest since January 29.

It was on track to notch up its sixth straight session of gains, the longest bullish run since December. It has gained about 10% so far this year, but is well below the $14,527.50 peak hit in January.

Copper's break above $13,500, which had been rejected several times since February, on Friday attracted funds that use technical levels, said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

"That price action looks pretty robust against the not-so-robust backdrop of the war in the Middle East. That points to supply being equally challenged at a time where demand is called into question."

Copper also received support after Freeport delayed the full resumption of its flagship Grasberg mine to early 2028 from the previous expectation of late 2027.

The most-traded copper contract SCFcv1 on the Shanghai Futures Exchange closed daytime trading 0.9% higher at 104,620 yuan ($15,396.39) a ton, after hitting a three-month high of 104,840 yuan.

Factory inflation in top metals consumer China beat expectations, data showed, raising hopes that the government's efforts to boost the economy were having an impact.

LME aluminium CMAL3 gained 1% to $3,538.50 a ton on persistent worries about the impact of the conflict on producers in the Middle East, which accounts for about 9% of global supply.

"A rapidly tightening aluminium market has left investors questioning why the LME aluminium price has not rallied more," Morgan Stanley analyst Amy Gower said in a note.

Among other metals, LME zinc CMZN3 edged up 0.1% to $3,433 a ton, lead CMPB3 added 0.3% to $1,980, nickel CMNI3 climbed 1.6% to $19,190, and tin CMSN3 gained 1.4% to $54,645.

($1 = 6.7951 Chinese yuan)