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METALS-Zinc rallies in afterglow of steel advance

MELBOURNE, Nov 22 (Reuters) - Zinc rallied by more than 1 percent early in London, tracking strength in Chinese steel prices on expectations that mills will restock following the country's forced production cuts over winter.

FUNDAMENTALS

* LME ZINC: London Metal Exchange (LME) zinc rose 1.4 percent to $3,236 a tonne, the highest since Nov. 11. Prices have also broken through shorter-dated moving averages, sending a buy signal to trend following funds.

* SHFE ZINC: Shanghai Futures Exchange zinc rallied 2.6 percent while Shanghai rebar was up 2.2 percent.

* IRON ORE: Chinese iron ore futures had rallied more than 1 percent on Monday, as steel prices recovered after a three-day slide.

* ZINC FUNDAMENTALS: Zinc was also supported by tightening fundamentals. The global zinc market deficit widened to 39,800 tonnes in September from a revised deficit of 38,700 tonnes in August, data from the International Lead and Zinc Study Group (ILZSG) showed.

* COPPER: LME copper edged up by 0.2 percent to $6,922.50 a tonne by 0157 GMT, extending 1.2 percent gains from the previous session the highest since Nov. 7 Shanghai copper rallied 1.6 percent to 54080 yuan ($8,156) a tonne.

* FEDERAL RESERVE: The Federal Reserve is "reasonably close" to its goals and should keep gradually raising U.S. interest rates to avoid the dual pitfalls of letting inflation drift below target for too long, and of driving unemployment down too far, Fed Chair Janet Yellen said on Tuesday.

* NICKEL: Nickel also used by the steel sector, retreated 0.7 percent following gains of near 2 percent in the previous session.

* CHINA PROPERTY: China will step up financial regulation and crack down on speculation in the property market to stabilize prices and fend off bubble risks, state television CCTV reported on Tuesday, signaling renewed efforts to rein in risks from a rapid build-up in debt in the economy.

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MARKETS NEWS

* Asian shares scaled a fresh decade peak on Wednesday thanks to surging markets in Europe and America, as strong global growth and rising corporate profits lured hordes of investors into equities.

DATA AHEAD (GMT) 1330 U.S. Durable goods Oct 1330 U.S. Weekly jobless claims 1500 Euro zone Consumer confidence flash Nov 1900 U.S. Federal Reserve releases minutes from Oct.31-Nov.1 policy meeting PRICES

BASE METALS PRICES 0146 gmt Three month LME copper 6921.5 Most active ShFE copper 54060 Three month LME aluminum 2090 Most active ShFE aluminum 14965 Three month LME zinc 3223 Most active ShFE zinc 25675 Three month LME lead 2477 Most active ShFE lead 18890 Three month LME nickel 11765 Most active ShFE nickel 95150 Three month LME tin 19400 Most active ShFE tin 142880

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 453.53 LME/SHFE ALUMINIUM LMESHFALc3 -1130.02 LME/SHFE ZINC LMESHFZNc3 400.77 LME/SHFE LEAD LMESHFPBc3 -912.32 LME/SHFE NICKEL LMESHFNIc3 2431.53

($1 = 6.6307 Chinese yuan renminbi)

(Reporting by Melanie Burton; Editing by Gopakumar Warrier)