(Adds LME copper open interest, Shanghai closing prices; updates LME prices) BEIJING/MELBOURNE, Nov 22 (Reuters) - Zinc rallied more than 1 percent in London on Wednesday, tracking strength in Shanghai steel prices on expectations that Chinese mills will restock following forced production cuts over winter. Zinc, which can be used in steel production, continues to be supported as supply from top producer and consumer China has been hit by environmental inspections. "In zinc, reduced Chinese mine production will keep balances tight, supporting prices over the next six months," J.P. Morgan said in a note.
* LME ZINC: London Metal Exchange (LME) zinc was up 1.4 percent at $3,236 a tonne by 0738 GMT, its 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 closed up 2.3 percent, while Shanghai rebar also ended up 2.3 percent. Sentiment on zinc was also bullish at the China Lead and Zinc Week gathering in Shenzhen, participants said.
* ZINC 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 was up by 0.6 percent at $6,949.50 a tonne, extending gains from the previous session, when it was up 1.2 percent. Shanghai copper closed up 1.6 percent at 54,110 yuan ($8,176.93) a tonne.
* OPEN INTEREST: Total open interest in LME copper was up by 1,100 lots to 309,401 lots, or 7.74 million tonnes, but remains around the lowest levels seen since February, 2016 ahead of the Thanksgiving holiday in the United States. <MCU-OI-TOT> THE FED: The Federal Reserve is "reasonably close" to its goals and should gradually keep 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, was down 0.8 percent on the LME, after posting gains of nearly 2 percent on Tuesday.
* 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.
* For the top stories in metals and other news, click or
* Asian shares joined a global rally to reach their highest in a decade on Wednesday as strong world growth and rising corporate profits lured hordes of investors into equities, while oil prices jumped closer to a recent 2-1/2 year top.
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 0738 GMT Three month LME copper 6949.5 Most active ShFE copper 54100 Three month LME aluminum 2106.5 Most active ShFE aluminum 14995 Three month LME zinc 3236 Most active ShFE zinc 25670 Three month LME lead 2484 Most active ShFE lead 18960 Three month LME nickel 11775 Most active ShFE nickel 95020 Three month LME tin 19415 Most active ShFE tin 142620
BASE METALS ARBITRAGE
LME/SHFE COPPER LMESHFCUc3 474.02 LME/SHFE ALUMINIUM LMESHFALc3 -1214.47 LME/SHFE ZINC LMESHFZNc3 334.77 LME/SHFE LEAD LMESHFPBc3 -851.16 LME/SHFE NICKEL LMESHFNIc3 2519.19
($1 = 6.6174 Chinese yuan renminbi)
(Reporting by Melanie Burton and Tom Daly in BEIJING; Editing