(Updates throughout, moves dateline from BEIJING)
BEIJING, Dec 24 (Reuters) - Zinc prices fell for a second day on Tuesday as an increase in stockpiles in China suggested that supply of the metal was on the rise.
Benchmark zinc on the London Metal Exchange (LME) was down 0.5% at $2,280 a tonne at 1054 GMT, retreating from Friday's high of $2,353.50 and nearing the three-month low of $2,201 touched on Dec. 3.
Trading activity was low with the LME closed on Wednesday and Thursday for the Christmas holiday.
Investors in China, the biggest metals consumer, began to take short positions in zinc after industry data provider SMM published data showing an increase in zinc stocks held there, a Beijing-based trader said.
The global refined zinc market will move to a small surplus next year after several years of deficit, said BMO analyst Colin Hamilton.
"There should be a build in visible inventories," he said, predicting prices would average $2,249 in 2020.
STOCKS: Data provider SMM said zinc ingot inventories in Chinese warehouses rose by 5,400 from Friday to 118,700 tonnes on Monday.
However, stocks in warehouses monitored by the Shanghai Futures Exchange (ShFE) at 32,641 tonnes are the lowest in nearly a year and inventories in LME-registered warehouses at 51,900 are near decade lows. <ZN-STX-SGH> <MZNSTX-TOTAL>
POSITIONING: The 20 biggest speculative investors on the Shanghai exchange raised their short position in February zinc by 1,115 lots to 71,314 lots on Tuesday while building their long position by 261 lots to 58,293 lots.
TREATMENT CHARGES: Treatment charges for zinc concentrate in China rose to $310 a tonne this month, the highest since June 2008, incentivising smelters to keep producing metal. <SMM-ZNCONC-IMP>
CHINA: China will step up support for employment to cope with rising pressure on job security, the cabinet said on Tuesday, as the world's second-largest economy slows.
ALUMINIUM: Cancellation of 270,525 tonnes of LME aluminum warrants -- a precursor to delivery of the metal out of the warehouse -- drove down the amount of metal available to the market in the LME system to 928,050 tonnes, reversing a recent buildup. <MALSTX-TOTAL>
Aluminum stocks in ShFE-registered warehouses at 193,820 tonnes are down from more than 700,000 tonnes in March and the lowest since early 2017. <AL-STX-SGH>
Benchmark LME aluminum was up 0.6% at $1,814.50 a tonne after touching its highest since Nov. 8.
OTHER METALS: LME copper was up 0.7% at $6,230.50 a tonne, nickel was down 0.5% at $14,280, lead rose 0.9% to $1,933.50 and tin slipped 0.4% to $17,230.
(Reporting by Tom Daly in BEIJING and Peter Hobson in LONDON; Editing by Kirsten Donovan)