METALS-Zinc set for biggest weekly gain since November

* LME/ShFE arb: http://tmsnrt.rs/2oQ5nm20 (Updates throughout, changes dateline from Sydney)

LONDON, Aug 18 (Reuters) - Zinc prices were on track on Friday for their biggest weekly rise since November, as a sharp fall in stocks held the metal near its highest in a decade.

Aluminium and copper were also near multi-year highs, after a wave of speculative buying underpinned by expectations of strong demand in China, the world's biggest metals consumer.

"A couple of weaker data points from China this week are not really going to derail the demand story. At the same time the supply of all industrial metals is generally quite tight," said ETF Securities strategist Nitesh Shah.

Prices could rise further as Chinese demand will likely remain solid until at least the end of the year, Shah said.

LME ZINC: Benchmark zinc on the London Metal Exchange was up 1.6 percent at $3,112 a tonne at 1014 GMT, close to a high of $3,147 set in the previous session and on track for a weekly rise of 7.4 percent.

SPECULATORS: The metal used to galvanise steel rose above the key technical level of $3,000 on Wednesday for the first time since October 2007, triggering pre-set buy orders and speculative fund buying, traders said, though profit taking and forward selling by producers was limiting gains.

STOCKS: Prices were supported by a fall in on-warrant stocks available to the market in LME-registered warehouses to 126,650 tonnes, following 23,050 tonnes of cancellations on Friday. On-warrant stocks have slid 60 percent this year. <MZNSTX-TOTAL>

CHINA TRADERS: A rise in steel trading fees this week prompted Chinese traders to divert money to zinc, fuelling its rise.

CHINA OUTPUT: Chinese zinc production fell 6.3 percent year-on-year in July to 476,000 tonnes, raising supply concerns.

CHINA ECONOMY: Chinese home price growth slowed in July, but a construction spree is still supporting the economy and the International Monetary Fund this week upgraded its short-term growth forecasts.

LME ALUMINIUM: Benchmark aluminium was up 0.2 percent at $2,080.50, close to the Thursday's peak of $2,112, the highest since September 2014. It was up 1.8 percent this week. Prices have risen on expectations of capacity cuts in China due to an environmental crackdown.

CHALCO: China's Chalco however said it increased primary aluminium output by 250,000 tonnes in the first half of 2017.

LME COPPER: Benchmark copper was flat at $6,492.50 a tonne after hitting $6,580 on Thursday, the highest since November 2014. It was up 1.3 percent this week.

CHINA SCRAP: China provided the first detail of a ban on scrap imports, saying it would still allow imports of some kinds of steel and non-ferrous scrap.

PRICES: Nickel was up 0.8 percent at $10,820, lead was flat at $2,412.50 and tin had gained 0.2 percent to $20,250 a tonne.

(Additional reporting by James Regan; Editing by David Holmes)