METALS-Lead hits 2-month peak on strong winter demand, deficit worries

* LME/ShFE arb: http://bit.ly/2wZSAEz

* GRAPHIC-2017 asset returns: http://tmsnrt.rs/2jvdmXl (Recasts, updates prices, adds details/quote; changes dateline)

LONDON, Dec 20 (Reuters) - Lead prices hit their highest in more than two months on Wednesday, driven by low stocks, a global market deficit, seasonally strong demand from the battery sector and supply tightness linked to technical factors.

Three-month lead on the London Metal Exchange traded up 0.4 percent at $2,561 a tonne at 1113 GMT, having earlier hit its highest since mid-October at $2,550. The metal is up about 25 percent so far this year and hit a six-year high in October.

"We have a chunky deficit, a winter demand uptick, we've had a fairly cold snap in Europe that's boosting demand, and inventories are low within the whole lead supply chain," said Robin Bhar, metals specialist at Societe Generale.

"I don't see any reason why we can't hold at these levels and push higher especially as copper seems to be aiming for $7,000, zinc seems to be pushing higher, there's going to be help from the rest of the base complex."

* DEFICIT: The global lead market showed a deficit of 10,000 tonnes in October after a surplus of 41,300 tonnes in September, according to the latest ILZSG industry snapshot.

* LME STOCKS: LME data showed lead stocks held in exchange warehouses fell to 142,000 tonnes, their lowest since December 2015. Of the total, 31 percent of stocks have been booked for delivery and are not available. <MPBSTX-TOTAL>

* LEAD CONSUMPTION: More than 80 percent of global lead consumption -- at around 11 million tonnes this year -- goes towards batteries, mainly for autos, demand for which has risen sharply in countries such as China due to growing affluence.

* TECHNICALS: LME data showed one entity holds between 50 and 80 percent of lead warrants or ownership tiles, fuelling worries about shortages on the LME market. <0#LME-WHL> The premium for the cash lead <MPB0-3> over the three-month contract rose to $24 a tonne on Monday but has since moved down to $4.20.

* ALUMINIUM: Aluminium hit its lowest since late November as rising raw material prices and production cuts in China provided end-of-year support to the market.

* ALUMINA: Alumina producers in northern China have been hit by an escalating natural gas shortage in the region, pushing up the price of the raw material for making aluminium.

* TARIFFS: U.S. President Donald Trump's new security strategy bolsters the case for trade actions to protect U.S. economic interests on national security grounds, including possible import tariffs on steel and aluminium.

* COLUMN: Threat of strikes looms large for copper supply in 2018: Andy Home

(Reporting by Tom Daly; Editing by David Evans)