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METALS-Shanghai zinc has worst day since Dec after LME stocks surge

(Updates prices) BEIJING, March 6 (Reuters) - Shanghai zinc futures fell more than 2 percent on Tuesday, their steepest drop in three months, tracking a decline in prices on the London Metal Exchange after LME warehouse inventories climbed. The metal, used to galvanise steel, is also coming under pressure after President Donald Trump said the United States would impose a tariff of 25 percent on steel imports. A number of countries, including China and Canada, have criticised the move, sparking talk of a trade war. Trump also vowed to impose a 10 percent duty on aluminium imports. "Trade war fears continue to overhang the markets ... causing headwinds for LME metals," broker Sucden Financial said in a note on Tuesday.

FUNDAMENTALS

* SHFE ZINC: The most-traded April zinc contract on the Shanghai Futures Exchange closed down 2.1 percent at 25,450 yuan ($4,011) a tonne, in its biggest daily drop since Dec. 6. It earlier touched 25,210 yuan a tonne, its lowest since Dec. 15.

* LME ZINC: Three-month LME zinc was little changed at $3,292.50 a tonne at 0729 GMT, after hitting a 2018 low in the previous session. Stocks of zinc in LME warehouses <MZN-STOCKS> jumped by 59 percent on Monday to 209,050 tonnes, and on-warrant stocks - those not earmarked for delivery - nearly doubled to 162,825 tonnes.

* LME COPPER: London copper rose 0.5 percent to $6,945 on a weaker dollar. A softer greenback makes metals cheaper for holders of other currencies and can support prices

* SHFE METALS: The most-traded April copper contract on the Shanghai Futures Exchange edged up 0.6 percent to 52,420 yuan a tonne, while lead shed 1 percent.

* TRUMP TARIFF PLAN: Trump faced growing pressure from political and diplomatic allies as well as U.S. companies urging him to pull back from proposed steel and aluminium tariffs, although he said he would stick to his guns.

* INDONESIA: Indonesia's President Joko Widodo has instructed his administration to complete negotiations over the purchase of a majority stake in Freeport-McMoRan Inc's local unit by the end of April, a cabinet minister said on Monday.

* COBALT: Australia's Celsius Resources, which has made Namibia's first cobalt discovery, is aiming to start production from the remote mine in 2020, the company's managing director said.

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MARKETS NEWS

* Asian shares regained some ground and the dollar held steady versus the yen, supported by receding fears about a global trade war.

PRICES

BASE METALS PRICES 0729 GMT Three month LME copper 6945 Most active ShFE 52420

copper

Three month LME 2146.5

aluminium

Most active ShFE 14440

aluminium

Three month LME zinc 3292.5 Most active ShFE zinc 25450 Three month LME lead 2417.5 Most active ShFE lead 18640 Three month LME nickel 13460 Most active ShFE 102410

nickel

Three month LME tin 21470 Most active ShFE tin 146590

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 1249.86 LME/SHFE ALUMINIUM LMESHFALc3 -1387.9 LME/SHFE ZINC LMESHFZNc3 629.58 LME/SHFE LEAD LMESHFPBc3 53.4 LME/SHFE NICKEL LMESHFNIc3 1347.18

($1 = 6.3449 Chinese yuan)

(Reporting by Tom Daly; Additional reporting by Manolo Serapio Jr. in Manila Editing by Joseph Radford and Subhranshu Sahu)