* Chinese holiday expected to subdue volumes this week
* Market focus is on U.S.-China trade dispute (Updates with official prices, adds nickel)By Pratima DesaiLONDON, Feb 4 (Reuters) - Zinc prices climbed to seven-monthhighs on Monday, lifted byconcerns over shortages due tofalling stocks and environmental constraints, and delays to newcapacity in top producer China.Benchmark zinc on the London Metal Exchange ended up0.8 percent at $2,800 a tonne. Earlier prices of the metal usedto galvanise steel touched $2,801 a tonne, the highest July 4."People are concerned about refined metal production andinventories," said BMO Capital Markets analyst Kash Kamal.
"What happens next will depend on whether post-wintershutdowns in China, steel producers start to restock and we seeincreasing refining activity."
OUTPUT: China's zinc output came in at 4.53 million tonnesin 2018, according to a survey of smelters by Antaike. Thatmarked a fall of 4.6 percent, or 218,000 tonnes, from 2017, thesteepest drop since 2013. PERFORMANCE: Zinc was the worst performer in the base metalscomplex in 2018, reporting a 25.7 percent drop on concerns ofoversupply. It is up nearly 13 percent so far this year.BALANCE: Analysts expect to see a balanced zinc market thisyear as mine supply grows to meet demand estimated this year ataround 14 million tonnes.INVENTORIES: Stocks of zinc at 112,500 tonnes are less thanhalf the levels seen last August. Also worrying the market arecancelled warrants -- metal earmarked for delivery - at nearly50 percent of total stocks.HOLDINGS: Concern about nearby zinc supplies has beenfuelled by one company holding between 50 and 79 percent of LMEzinc warrants and cash contracts.VOLUMES: Volumes are expected to be subdued this week due tothe Lunar New Year holiday in China, which accounts for aroundhalf of global demand for industrial metals.TRADE: U.S. President Donald Trump said last week he willmeet Chinese President Xi Jinping soon to try to seal acomprehensive trade deal as Trump and his trade negotiator bothcited substantial progress in two days of talks. NICKEL: Prices of the metal used to make stainlesssteel climbed 4.7 percent to $13,260 a tonne from an earlier4-month high at $13,275 a tonne.Traders say the rise is due to a short squeeze. One firm isholding a large short position, while another islong, holding between 50 and 79 percent of cash contracts andwarrants .
DOLLAR: A firmer U.S. currency, which makesdollar-denominated commodities more expensive for holders ofother currencies was weighing on prices of industrial metals.PRICES: Copper closed 0.5 percent higher at $6,168 atonne, aluminium gained 1.9 percent to $1,919, lead ended little changed at $2,128 and tin ceded 0.4percent to $20,800.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top Base and Precious Metals Analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Pratima Desai; editing by Louise Heavens andDavid Evans)