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METALS-London zinc prices hold after rally on supply concerns

(Updates prices)

SYDNEY, Jan 5 (Reuters) - London zinc held recent gains on Friday after overnight prices touched their highest in over a decade due to supply concerns, while the Shanghai market firmed.

Zinc stocks held in London Metal Exchange warehouses <MZN-STOCKS> fell 250 tonnes to their lowest since late 2008, data showed on Thursday, down by a third from their October peak.

Commodities traders and analysts say under-investment in new zinc mines as older ones close and Chinese efforts to reduce industry-generated pollution are stoking expectations for continued supply deficits in the months ahead.

The global zinc market deficit widened to 36,900 tonnes in October from a revised deficit of 35,900 tonnes in September, the latest figures from the International Lead and Zinc Study Group show.

FUNDAMENTALS

* LONDON ZINC: Three-month LME zinc stood at $3,364 a tonne by 0700 GMT, matching Thursday's intraday peak, its highest since August, 2007.

* SHANGHAI ZINC: The most-traded zinc contract on the Shanghai Futures Exchange closed up 1 percent at 26,080 yuan ($4,019.73) a tonne. It earlier marked its strongest since Nov. 1 at 26,140 yuan a tonne.

* DOLLAR DOWN: The euro hovered near a three-year high against the sagging dollar on Friday, while improving investor risk appetite weighed on the yen.

* COPPER, NICKEL: LME copper slipped 0.07 percent to $7,183.50 a tonne, LME aluminum was flat at $2,250 and nickel was down 0.8 percent at $12,540.

* CHINA STEEL BAN: China will continue to "unswervingly" cut existing steel capacity and "strictly" ban the launch of any new steelmaking facilities in 2018, its government said this week.

PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminum

Most active ShFE aluminum

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 6.4880 Chinese yuan renminbi)

(Reporting by James Regan; Editing by Joseph Radford)