SYDNEY, July 4 (Reuters) - Shanghai zinc futures opened more than 1 percent higher, tracking similar overnight gains in the London market amid expectations the metal's fundamentals had turned a corner, thanks to a robust outlook for Chinese steel.
Chinese steel futures were up 1.26 percent after galloping more than 3 percent on Monday on firm demand in China and data showing a recovery in China's manufacturing activity. Zinc is used to galvanise, or rust-proof steel.
* ZINC: London Metal Exchange three-month zinc was steady at $2,800 a tonne after hitting its highest price since April 6 overnight. The price is up more than 10 percent since June 7.
* ShFE Zinc was up 1 percent at 23,030 yuan ($3,387.56)a tonne
* CHINA GROWTH: China's manufacturing sector reversed into growth mode in June, expanding at the fastest pace in three months after unexpectedly contracting in May, as new orders and production rose.
* SHORTAGES: Macquarie expects a 650,000-tonne zinc shortfall this year and sees prices breaching $3,000 a tonne by the fourth quarter. Societe Generale's Robin Bhar is not so bullish and expects a deficit of 250,000 tonnes this year.
* INVENTORIES: Zinc stocks in LME-approved warehouses at 289,275 are down more than 30 percent this year, while those monitored by the Shanghai Futures Exchange have tumbled nearly 60 percent to less than 65,000 tonnes. <CU-STX-SGH<
* Three-month copper on the London Metal Exchange dropped 0.46 percent to $5,902.50 a tonne by 0100 GMT, extending losses from the previous session.
* The most-traded copper contract on the Shanghai Futures Exchange dropped 0.49 percent to 47,150 yuan a tonne.
* Brazil's Vale is reassessing its loss-making New Caledonian nickel operations as part of a wider review of low performing assets after new Chief Executive Fabio Schvartsman took charge last month.
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* Asian shares climbed on Tuesday, following positive leads from Europe and the U.S. as oil's longest stretch of daily price gains in over five years lifted energy shares and investor rotation out of technology into financials continued.
DATA AHEAD (GMT) 0900 Euro zone Producer prices May U.S. markets shut for Independence Day holiday
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
ARBS ($1 = 6.7984 Chinese yuan)
Reporting by James Regan; Editing by Sunil Nair