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METALS-London zinc hits highest in a decade on China construction spend

 (Adds comment, detail)
    By Melanie Burton
    MELBOURNE, Aug 16 (Reuters) - London zinc hit its highest in
almost a decade on Wednesday as Chinese infrastructure demand
that has fed a rally in steel prices for months spills into
markets for steelmaking raw materials. 
     The rally in zinc, used for galvanising steel, comes as
China steps up plans to develop infrastructure while capacity
cuts in its steel industry boost prices, said analyst Daniel
Hynes of ANZ in Sydney.
    "There (was) a fair level of scepticism at the start of the
year when China's infrastructure projects were announced but
we're seeing much better-than-expected growth in fixed asset
investment," said Hynes. "That resetting of expectations is
resulting in that much more positivity to the sector."    
      
    FUNDAMENTALS
     * LME ZINC: London Metal Exchange zinc peaked at
$2,994 a tonne, having cracked its Nov. 2016 high to take prices
back to their most expensive since Oct. 2007. 
    * CHINA GROWTH: China's strong economic growth showed
visible signs of fading in July as lending costs rose and the
gravity-defying property market cooled, though activity levels
generally remained solid, propped up by a year-long construction
spree.
    * FIXED ASSET: China fixed-asset investment still grew 8.3
percent in the first seven months of the year, even as it slowed
from 8.6 percent in the first half.
    * STEEL: Gains came even as Chinese steel and iron ore
futures slipped for a fourth session as recent moves by the
Shanghai exchange to increase trading charges kept the two
commodities under pressure.
    * ALUMINIUM: LME aluminium hit its highest since
November, 2014 as China reforms its bloated aluminium sector.
    * HONGQIAO: The world's top aluminium maker, China Hongqiao
Group clarified in a notice to the Hong Kong Exchange
that it has shut down 2.68 million tonnes of production
capacity, representing 29 percent of the group's total aluminium
product capacity.
    * COPPER: LME copper rose by half-a-percent to
$6,409 a tonne, still below its most recent 2-1/2 year top at
$6,515. 
    * FREEPORT: Flash floods have caused extensive damage to a
power plant at U.S.-owned miner Freeport Indonesia's operations,
company officials said on Wednesday.
    * SHANGHAI: On the Shanghai Futures Exchange, copper
 was little changed, but zinc and aluminium
 finished up around 2 percent. 
    * M&A: Mergers and acquisitions by Chinese companies in
countries that are part of the Belt and Road initiative are
soaring, even as Beijing cracks down on China's acquisitive
conglomerates to restrict capital outflows.
    * COMING UP: U.S. housing starts, building permits for July
at 1230 GMT 
    
    PRICES    
    
 BASE METALS PRICES            0723 GMT          
 Three month LME copper                    6402.5
 Most active ShFE                           50170
 copper                                  
 Three month LME                           2063.5
 aluminium                               
 Most active ShFE                           16095
 aluminium                               
 Three month LME zinc                        2997
 Most active ShFE zinc                      24740
 Three month LME lead                        2406
 Most active ShFE lead                      19440
 Three month LME nickel                     10470
 Most active ShFE                           85370
 nickel                                  
 Three month LME tin                        20015
 Most active ShFE tin                      143410
                                                 
 BASE METALS ARBITRAGE                           
 LME/SHFE COPPER          LMESHFCUc3       220.47
 LME/SHFE ALUMINIUM       LMESHFALc3        22.59
 LME/SHFE ZINC            LMESHFZNc3       775.53
 LME/SHFE LEAD            LMESHFPBc3       -76.17
 LME/SHFE NICKEL          LMESHFNIc3      1937.67
 
    
 (Reporting by Melanie Burton; Editing by Joseph Radford and
Kenneth Maxwell)
  
 
 
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