METALS-Copper steadies after sharp losses, other metals fall on China jitters

* LME/ShFE arb: http://bit.ly/2wZSAEz (Recasts, updates prices, adds details/quote; changes dateline)

LONDON, Dec 6 (Reuters) - Copper steadied on Wednesday after sharp falls in the previous session, while other metals fell on concerns that China could see a weaker first half of 2018 and as investors looked to reduce their long exposure before the end of this year.

Three-month copper on the London Metal Exchange traded up 0.6 percent at $6,581.50 a tonne by 1125 GMT, having plummeted 4.2 percent on Tuesday, its steepest daily drop since July 2015.

"We're just bouncing a tad (in copper). The (weaker) dollar is providing some support (but) from here, a winter slowdown in China, the government's intention to rein back financial risk, that could have a (negative) impact on copper demand," said Ole Hansen, head of commodity strategy at Saxo Bank.

"Also the speculative position in metals has been to the long side (so) if we do run into some risk aversion, that (could) drive prices lower because of the need to lower exposure ... this time of year," he added.

Zinc, used to galvanize steel, hit its lowest since mid-October at $3,068 a tonne, while nickel, used mainly in stainless steelmaking, hit its weakest since early October at $10,810.

* CHINA DATA: A raft of Chinese data in coming weeks is expected to show that the world's second-largest economy came under growing pressure in November as the government intensified crackdowns on polluting industries and financial risks.

* STEEL: Chinese steel futures dropped more than 3 percent on Wednesday after recent sharp gains that lifted prices to their strongest level in three months, although firm demand and tight supply kept investor sentiment upbeat.

* TECHNICALS: Zinc fell below its 100-day moving average (DMA), a technical indicator, sending a bearish signal to markets, while nickel remained below the 100 DMA after cracking the level on Tuesday, when it fell 4.6 percent.

* COPPER DEMAND: The "sluggish investment in power indicates copper demand in China may remain weak for a while," said Helen Lau, an analyst at Argonaut Securities, adding that she expected to see "more downward pressure" over the short term.

* COPPER PUTS: Traders pointed to a large 3,500 strike at $6,500 in December copper put options, which could drag on prices. <0#MCUZ7+>

* COPPER SUPPLY: The Tanzania-Zambia Railway Authority (TAZARA) has suspended all train services, including the transportation of copper, following a strike by workers in Africa's No. 2 producer of the metal.

* ZINC HOLDINGS: Indicating a potential squeeze in nearby zinc availability, LME data showed one entity holds between 80-90 percent of physical zinc warrants as well as cash and 'tomorrow' contracts. <0#LME-WHC> <0#LME-WHT> <0#LME-WHL>

(Additional reporting by Tom Daly; Editing by Gareth Jones)