(Recasts, add comments, details, pvs Singapore) * No resolution of Escondida strikes * Collahuasi strike lasts just 24 hours * Washington reaches deal on debt ceiling limit * Coming up: U.S. ISM manufacturing index; 1400 GMT By Silvia Antonioli LONDON, Aug 1 (Reuters) - Copper rose to its highest in almost four months as a continued strike at the world's largest mine increased concerns over supply, while leaders in the U.S. Congress agreed a deal to raise U.S. borrowing, easing worries of debt default. Benchmark copper on the London Metal Exchange rose 0.3 percent to trade at $9,846 a tonne in official rings, up from a close of $9,820 a tonne on Friday. Earlier, the metal used in power and construction hit its highest in almost four months at $9,905 per tonne. President Barack Obama announced on Sunday that Democrat and Republican leaders had reached an agreement to reduce the U.S. deficit and avoid default. This prompted investors to unwind safe haven positions and bet on assets, such as base metals, perceived as riskier. "The tentative deal to raise the debt ceiling in the U.S., plus no resolution of the Escondida strikes, plus a 24-hour strike at Collahuasi: there is a lot going on supporting copper and other metals," said Credit Agricole analyst Robin Bhar. "Investors are looking to hedge economic uncertainties by betting on tangible assets; they want exposure to emerging economies and they are looking for an inflation hedge." As the U.S. Congress leaders agreed on a plan to avoid an unprecedented default, investor focus shifted back to copper supply constraints. A strike at the world's No.1 copper mine, Chile's Escondida, pushed into an 11th day, but the risk of it spreading appeared limited after a weekend walkout at the No. 3 mine, Collahuasi, lasted just 24 hours. Escondida and its workers remain deadlocked over a bonus demand, but the miners' union said that was the only remaining sticking point, raising expectations of a possible solution to the strike at a mine that extracts 7 percent of the world's copper. In a Reuters poll last month, a consensus of analysts forecast a 343,150 tonnes deficit for copper this year but recent strikes at the Chilean mines are likely to have exacerbated the tightness. Capping gains, the market was digesting Friday's data showing softer-than-expected U.S. economic growth. The U.S. economy stumbled in the first half of 2011 and came dangerously close to contracting in the January-March period, raising the risk of a recession if a standoff over the debt does not end quickly. Investors were eying U.S. manufacturing data, which will be released at 1400 GMT. INVENTORIES DECLINE Inventories of copper in LME-registered warehouses fell 525 tonnes to 466,025 tonnes but remained more than a third higher than in mid-December last year. High inventory levels in the last few months raised concerns over demand weakness in China, but some analysts argue that Chinese buyers, who have been tapping into their inventories in the first half of the year, will have to increase copper imports soon. "We believe investors were also mindful that cancelled warrants among most LME metals are currently above long-term averages, signalling inventory levels are likely to decline in the coming weeks, in part from resilient demand," Morgan Stanley said in a note. Other base metals such as aluminium, tin and lead were showing healthy price increases on Monday, rising by about 1-2 percent from the close on Friday. "They all had good technical break outs and now we are targeting higher levels," Bhar said. "If we go above certain (price) levels we could see some of the big funds coming into the market again." Positive fundamentals were also supporting prices. Boosting aluminium, smelters in Henan province, China's top producer of the metal, face electricity supply cuts that could hit output at a time of high domestic prices if summer power demand continues to surge, industry sources said on Friday. Expectations of a narrowing surplus in the second half of the year, increased stainless steel production and technical buying were boosting nickel pricing, RBC said in a note. Aluminium traded at $2,633 per tonne in rings from $2,624 while nickel was at $25,135 from $24,995. Tin traded at $28,600 in rings from $28,100 while zinc , used in galvanising, changed hands at $2,508 from $2,490 Friday's close. Battery material lead , untraded in rings, was bid at $2,640 from $2,613. Metal Prices at 1207 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2010 Ytd Pct

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