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METALS-London zinc, nickel, spring back as markets stabilise

MELBOURNE, Sept 25 (Reuters) - London zinc and nickel bounced back as markets stabilised on Monday after investors slashed risk late last week on concerns about China's credit and escalating tensions over North Korea.

FUNDAMENTALS

* COPPER: London Metal Exchange copper rose 0.4 percent to $6,484 a tonne by 0242 GMT, having fallen on Friday to its weakest since Aug. 16 at $6,366. Shanghai Futures Exchange copper rose 1 percent to 50,380 yuan ($7,625).

* NICKEL: LME nickel which crumbled by more than 5 percent on Friday after the SHFE hiked trading fees for the volatile contract, sprang back by 1.3 percent.

* INVESTORS: Hedge funds and money managers cut their net long position in COMEX gold contracts from a one-year high in the week to Sept. 19, as they also reduced bullish stances in silver and copper, U.S. Commodity Futures Trading Commission data showed on Friday.

* CHINA LENDING: China's latest push to revive its bloated state-owned sector is set to pick up pace this year, with bankers and investors expecting possible spin-offs and asset sales to follow a key Communist Party Congress in October.

* S. KOREA JITTERS: Some banks have begun to pare back credit lines to smaller trading companies holding industrial metals in South Korea amid escalating tensions over North Korea's nuclear and missile program, two industry sources said this week.

* CHINA MINING: China's mining industry will shrink if the government does not cut it some slack in return for compliance with strict environmental policies, the head of one of the country's largest gold miners said on Saturday.

* ZINC M&A: Kazakhstan-focused copper miner Central Asia Metals said it would buy Bermuda-based Lynx Resources Ltd, a miner of lead and zinc, in a $402.5 million reverse-takeover deal from its owners.

* CHINA POLLUTION: Cities in China's eastern province of Anhui are issuing plans to curb production in the steelmaking, non-ferrous smelting, cement and coal-fired power sectors over the coming winter in a drive to meet a politically crucial air pollution target.

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MARKETS NEWS

* U.S. Treasury and gold prices rose while the Japanese yen strengthened on Friday as a fresh exchange of barbs between North Korea and the United States fueled geopolitical concerns.

DATA AHEAD (GMT) 0800 Germany Ifo business climate Sep 1230 U.S. National activity index Aug 1430 U.S. Dallas Fed manufacturing index Sep PRICES

BASE METALS PRICES

Three month LME copper 6474.5 Most active ShFE copper 50300 Three month LME aluminium 2149.5 Most active ShFE 16475

aluminium

Three month LME zinc 3084.5 Most active ShFE zinc 25175 Three month LME lead 2489 Most active ShFE lead 20725 Three month LME nickel 10540 Most active ShFE nickel 84030 Three month LME tin 20585 Most active ShFE tin 145370

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 338.63 LME/SHFE ALUMINIUM LMESHFALc3 -16.03 LME/SHFE ZINC LMESHFZNc3 820.14 LME/SHFE LEAD LMESHFPBc3 206.74 LME/SHFE NICKEL LMESHFNIc3 1796.37

($1 = 6.6076 Chinese yuan renminbi)

(Reporting by Melanie Burton; Editing by Richard Pullin)