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METALS-Zinc gains as Chinese output falters ahead of winter shutdowns

(Adds comments, updates prices, changes dateline from MELBOURNE)

LONDON, Oct 23 (Reuters) - Zinc prices rose on Monday after data showed output in China slipped in September, highlighting worries that winter production cuts are tightening supplies of metals.

Data on Monday showed zinc production fell 2.7 percent last month to 537,000 tonnes after numbers last week showed aluminium output dropped 5.6 percent to 2.6 million tonnes, its lowest since April 2016.

"It could be that the winter production cuts are already having an impact. I do see this as a factor supporting prices for the remainder of the year," said Caroline Bain, chief commodities economist at Capital Economics in London.

Metals rose across the board on the London Metal Exchange, still basking in the glow of last week's firm growth data in China, the world's biggest metals consumer.

"I think it's a continuation of the positive sentiment from last week," Bain said.

That data showed the world's second-largest economy grew at 6.8 percent in the third quarter and remained on track to post the first full-year pickup in seven years.

The head of the state planning agency said on Saturday that China's economy is on track to meet its official growth target for 2017 despite a punishing war on pollution.

* ZINC: Benchmark LME zinc was up 1 percent at $3,129.50 a tonne by 1015 GMT after dipping 0.5 percent on Friday.

* ZINC SPREADS: The premium of cash zinc over three-month zinc <CMZN0-3> remained elevated at $53 a tonne, showing near-term supply was still limited. It was down from a peak of $91 on Oct. 12 but much higher than the peak for the year before mid-September of $11.

Traders say the high premiums are linked to one party continuing to hold a large position -- more than 90 percent of available inventories and short-term futures. <0#LME-WHT>

* COPPER: Three month copper added 0.4 percent to $6,978 a tonne, with gains capped by data showing Chinese refined copper output rose 6.8 percent in September to its highest since December 2014.

Copper has retreated from a three-year peak of $7,177 hit last week, when it posted its fourth straight weekly gain.

* INVESTORS: Hedge funds and money managers increased their net long position in COMEX copper contracts to a five-week high in the week to Oct. 17, data showed on Friday.

* NICKEL: LME nickel rose 0.7 percent to $11,820 a tonne, bolstered by gains Chinese steel prices.

"The volumes so far on nickel have been decent and in a relatively tight range, but given the rally we have seen in bulks, the move higher has been somewhat muted so far," broker Marex Spectron said in a report.

(Additional reporting by Melanie Burton in Melbourne; Editing by David Goodman)