* LME/ShFE arb: http://tmsnrt.rs/2oQ5nm20 (Updates throughout, changes dateline from Melbourne)
LONDON, Aug 16 (Reuters) - Zinc rose to its highest in almost a decade on Wednesday and aluminum hit a 33-month high on expectations of strong global demand, tighter supplies and speculative buying.
"Momentum funds are buying the strength, piling in as the price rises," said a metals trader in London. But forward selling by producers keen to lock in a high price was limiting gains, he said.
"These levels are likely too high from a market fundamental point of view," said Danske Bank analyst Jens Pedersen.
LME ZINC: Benchmark zinc on the London Metal Exchange was up 2.1 percent at $3,023 at 1019 GMT after earlier touching $3,029, the highest since October 2007.
ZINC: The metal used to galvanize steel is benefiting from Chinese infrastructure development and higher steel prices caused by capacity cuts, said analyst Daniel Hynes of ANZ in Sydney.
CHINA ECONOMY: Strong growth in the world's largest consumer of metals showed signs of fading in July as lending costs rose and the property market cooled, but activity remained solid, propped up by a year-long construction spree.
CHINA FORECAST: The International Monetary Fund raised its forecast for China's average annual growth over 2018-2020.
CHINA LOANS: Banks extended more net new yuan loans than expected last month.
ZINC SPECULATORS: The rise to $3,000 triggered technical buying, said a metals trader. But he said some funds expecting Chinese growth to slow later this year were looking to bet on lower prices and zinc could fall to $2,750 a tonne.
ZINC STOCKS: Supporting prices was a fall in on-warrant zinc available to the market at LME-registered warehouses of 5,500 tonnes, to 149,700 tonnes. Headline zinc stocks have tumbled 41 percent this year to the lowest since December 2008. <MZNSTX-TOTAL>
LME ALUMINIUM: Three-month LME aluminum was up 0.9 percent at $2,067 a tonne after touching $2,075, the highest since November 2014.
CHINA ALUMINIUM: Output fell 8.2 percent in July as capacity cuts started to take their toll. China produces more than half the world's aluminum.
HONGQIAO: China Hongqiao Group, the country's biggest producer, said it had shut 2.68 million tonnes of production capacity, or 29 percent of its total.
ALUMINIUM SPREAD: Tight supplies on the LME market created a premium for the cash over three-month contract <MAL0-3> for the first time since February. The premium was $5.25 a tonne.
PRICES: Copper was up 1.3 percent at $6,459.50, nickel was 2.1 percent higher at $10,570, lead had gained 1.7 percent to $2,421.50 and tin was down 0.2 percent at $20,055 a tonne.
(Additional reporting by Melanie Burton, editing by David Evans)