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METALS-London zinc extends gains on tight market, weaker dollar

(Adds comment, detail, updates prices) MELBOURNE, Jan 29 (Reuters) - London zinc surged nearly 3 percent on Monday to its highest in more than 10 years, with a weaker dollar triggering buying amid bets that tightening global supply will propel prices even higher. "The release of manufacturing data in China this week should set the tone for commodity markets. Another strong PMI should snuff out any concerns over weakening demand leading into the Chinese New Year," ANZ said in a report.

FUNDAMENTALS

* London Metal Exchange zinc rose 2.3 percent to $3,558 a tonne by 0500 GMT, having earlier topped out at $3,584, the highest since mid-2007. In Shanghai prices climbed nearly 4 percent before settling up 3.4 percent.

* Under-investment in zinc mines during the economic downturn over the last 10 years has led to shortfall of the metal: LME zinc inventories have slumped below 180,000 tonnes, of which less than 100,000 tonnes is available to market - the least since 2008. In China, exchange stockpiles ticked higher last week but also remain close to 10-year lows. <ZN-STX-SGH> <MZNSTX-TOTAL>

* LEAD, NICKEL: Sister metal lead and steel-linked material nickel followed in zinc's wake, up by 1.6 and 2.5 percent respectively.

* LME copper climbed 0.9 percent to $7,145 a tonne, erasing losses from the previous session. Shanghai Futures Exchange copper edged up 0.1 percent 53,640 yuan ($8,481) a tonne.

* USD: The dollar crawled up from lows on Monday but struggled to pull ahead from six straight weeks of losses on its evaporating yield advantage and doubts about Washington's commitment to a strong currency.

* CHINA ECONOMY: China's economic growth will likely slow to 6.5-6.8 percent this year, a senior official at the country's top economic planner wrote in the Beijing Daily on Monday, while warning about the risks of "Black Swan" and "Gray Rhino" events.

* INVESTORS: Hedge funds and money managers cut their net long position in COMEX copper contracts in the week to Jan. 23, U.S. Commodity Futures Trading Commission data showed on Friday.

* COPPER STRIKE: Chile's Codelco has struck a contract deal with workers at its Andina copper mine, it said on Saturday, as the state-owned company tries to reach advance agreements with some unions in a year expected to be rife with labour negotiations.

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MARKETS NEWS

* Asian shares extended their bull run on Monday amid upbeat corporate earnings and strong global economic growth, while the dollar tried to bounce even as the White House continued to complain of "unfair" trade practices by competitors. PRICES 0449 GMT

Three month LME copper 7146 Most active ShFE copper 53600 Three month LME aluminium 2261.5 Most active ShFE aluminium 14720 Three month LME zinc 3558.5 Most active ShFE zinc 27070 Three month LME lead 2633.5 Most active ShFE lead 19735 Three month LME nickel 13990 Most active ShFE nickel 106500 Three month LME tin 21750 Most active ShFE tin 151220 LME/SHFE COPPER LMESHFCUc3 907.66 LME/SHFE ALUMINIUM LMESHFALc3 -1896.18 LME/SHFE ZINC LMESHFZNc3 369.04 LME/SHFE LEAD LMESHFPBc3 -356.82 LME/SHFE NICKEL LMESHFNIc3 1565.32

($1 = 6.3250 Chinese yuan renminbi)

(Reporting by Melanie Burton; Editing by Kenneth Maxwell and Richard Pullin)