(Adds comment, detail) By Melanie Burton MELBOURNE, Aug 16 (Reuters) - London zinc hit its highest in almost a decade on Wednesday as Chinese infrastructure demand that has fed a rally in steel prices for months spills into markets for steelmaking raw materials. The rally in zinc, used for galvanising steel, comes as China steps up plans to develop infrastructure while capacity cuts in its steel industry boost prices, said analyst Daniel Hynes of ANZ in Sydney. "There (was) a fair level of scepticism at the start of the year when China's infrastructure projects were announced but we're seeing much better-than-expected growth in fixed asset investment," said Hynes. "That resetting of expectations is resulting in that much more positivity to the sector." FUNDAMENTALS * LME ZINC: London Metal Exchange zinc peaked at $2,994 a tonne, having cracked its Nov. 2016 high to take prices back to their most expensive since Oct. 2007. * CHINA GROWTH: China's strong economic growth showed visible signs of fading in July as lending costs rose and the gravity-defying property market cooled, though activity levels generally remained solid, propped up by a year-long construction spree. * FIXED ASSET: China fixed-asset investment still grew 8.3 percent in the first seven months of the year, even as it slowed from 8.6 percent in the first half. * STEEL: Gains came even as Chinese steel and iron ore futures slipped for a fourth session as recent moves by the Shanghai exchange to increase trading charges kept the two commodities under pressure. * ALUMINIUM: LME aluminium hit its highest since November, 2014 as China reforms its bloated aluminium sector. * HONGQIAO: The world's top aluminium maker, China Hongqiao Group clarified in a notice to the Hong Kong Exchange that it has shut down 2.68 million tonnes of production capacity, representing 29 percent of the group's total aluminium product capacity. * COPPER: LME copper rose by half-a-percent to $6,409 a tonne, still below its most recent 2-1/2 year top at $6,515. * FREEPORT: Flash floods have caused extensive damage to a power plant at U.S.-owned miner Freeport Indonesia's operations, company officials said on Wednesday. * SHANGHAI: On the Shanghai Futures Exchange, copper was little changed, but zinc and aluminium finished up around 2 percent. * M&A: Mergers and acquisitions by Chinese companies in countries that are part of the Belt and Road initiative are soaring, even as Beijing cracks down on China's acquisitive conglomerates to restrict capital outflows. * COMING UP: U.S. housing starts, building permits for July at 1230 GMT PRICES BASE METALS PRICES 0723 GMT Three month LME copper 6402.5 Most active ShFE 50170 copper Three month LME 2063.5 aluminium Most active ShFE 16095 aluminium Three month LME zinc 2997 Most active ShFE zinc 24740 Three month LME lead 2406 Most active ShFE lead 19440 Three month LME nickel 10470 Most active ShFE 85370 nickel Three month LME tin 20015 Most active ShFE tin 143410 BASE METALS ARBITRAGE LME/SHFE COPPER LMESHFCUc3 220.47 LME/SHFE ALUMINIUM LMESHFALc3 22.59 LME/SHFE ZINC LMESHFZNc3 775.53 LME/SHFE LEAD LMESHFPBc3 -76.17 LME/SHFE NICKEL LMESHFNIc3 1937.67 (Reporting by Melanie Burton; Editing by Joseph Radford and Kenneth Maxwell)
Our Standards: The Thomson Reuters Trust Principles.