METALS-Deficit expectations push zinc to highest since 2007

* LME/ShFE arb: http://tmsnrt.rs/2oQ5nm20

* Nickel, Indonesia and the Philippines: http://tmsnrt.rs/2faVBvx

* Canceled zinc warrants at nearly 50 percent (Recasts, adds comment, changes dateline from Melbourne)

LONDON, Aug 21 (Reuters) - Zinc prices climbed to their highest in nearly a decade on Monday as expectations of a market deficit fueled speculative buying, though technical factors are likely to limit gains.

Benchmark zinc on the London Metal Exchange was up 0.6 percent at $3,142 a tonne. Prices of the metal used to galvanize steel had earlier touched $3,180.5, the highest since October 2007.

"We might see higher levels if the International Lead and Zinc Study Group (ILZSG) confirms the zinc market was in deficit for the first half of the year," said Commerzbank analyst Eugen Weinberg.

"There has been a lot of momentum buying. There is a chance of a price correction as these levels may mean a reversal of capacity shutdowns."

ILZSG: The study group last month said that the zinc market registered a deficit of 178,000 tonnes between January and May. The average of analysts' forecasts in a recent Reuters survey predicted a zinc market deficit of 412,000 tonnes this year.

TECHNICALS: Zinc price support is seen at $2,900 -- an area of congestion this year. The first upside barrier is at a Fibonacci retracement level of $3,200.

LME STOCKS: Zinc stocks in LME-approved warehouses, at 247,850 tonnes, are down more than 40 percent since the start of the year. Canceled warrants -- metal earmarked for delivery -- at nearly 50 percent also reinforce concern about shortages on the LME market. <MZNSTX-TOTAL>

SPREADS: Worries about a tight market have narrowed the discount for the cash zinc contract against the three-month <MZN0-3> to $7 a tonne from more than $27 at the start of April.

NICKEL PRICE: Nickel was up 2.4 percent at $11,240 a tonne. The stainless steel raw material earlier touched $11,270, its highest since the middle of December.

STOCKS: The nickel price spiked after LME data showed net fresh canceled warrants of more than 17,000 tonnes. Canceled warrants as a percentage of total stocks stand at 35 percent. <MNISTX-TOTAL>

PHILIPPINES: Worries about nickel supplies from the Philippines, the world's top nickel ore exporter, have supported prices for much of this year.

ALUMINIUM: An environmental crackdown in top producer China pushed prices to $2,112 a tonne last week, the highest since September 2014. It was last up 0.8 percent at $2,079.

The premium <CMAL0-3> for the cash aluminum contract over the three-month contract ended at $9.50 a tonne on Friday. That compares with a discount of $26 a month ago.

OTHER PRICES: Copper gained 1.2 percent to $6,562 a tonne, lead rose 0.3 percent to $2,368 and tin was up 0.7 percent at $20,380.

(Editing by David Goodman)