https://www.reuters.com/article/global-metals-idUSL4N1IO2TM

METALS-Zinc and nickel rise on China steel industry crackdown

* Chinese crackdown on polluting industries supports prices (Adds closing prices)

By Zandi Shabalala

LONDON, May 22 Zinc and nickel prices touched their highest in more than two weeks on Monday after China launched a regional crackdown on the steel industry, including production of the two metals.

Benchmark zinc on the London Metal Exchange closed 0.7 percent higher at $2,633 a tonne, its highest since May 2. Nickel hit its highest since May 3, up 0.4 percent to $9,395.

"The Chinese government is becoming quite aggressive in targeting environmental problems," said Oxford Economics commodities analyst Dan Smith.

Nickel is mainly used to make stainless steel, while zinc is used to galvanise steel.

FUNDAMENTALS

CHINA POLLUTION: China's Tangshan city launched a campaign to improve air quality last week, saying that steel mills in the country's top-producing region that fail to meet emission standards face suspension and heavy fines.

INVENTORIES: Zinc prices are also gaining support from falling stocks in LME-approved warehouses, with inventories down about 20 percent this year at 342,675 tonnes. These are levels last seen in 2009. MZNSTX-TOTAL

ZINC: Prices have risen by more than 40 percent over the past year as mine closures and suspensions have fuelled concerns over potential shortages.

STEEL: Chinese steel futures jumped more than 6 percent on Monday to their highest since

FREEPORT: An estimated 9,000 workers at the giant Grasberg copper mine operated by the Indonesian unit of Freeport McMoRan Inc will extend a strike for a second month, a union official said on Saturday, in an ongoing dispute over employment terms and layoffs.

COPPER: Copper edged down 0.4 percent to $5,703 a tonne, having hit the highest since early May at $5,694.50 on Friday.

CHINESE ECONOMY: China's economy is likely to expand by about 6.8 percent in the second quarter of 2017, the State Information Center said in an article in the state-owned China Securities Journal on Saturday.

DOLLAR: Support for base metals also came from a weaker U.S. currency, which makes dollar-denominated metals cheaper for non-American companies, potentially boosting demand.

OTHER METALS: Aluminium eased 0.3 percent to $1,938, lead slipped 0.1 percent to $2,092 and tin added 0.4 percent to $20,480.

(Additional reporting by Melanie Burton in Melbourne; Editing by David Goodman and Mark Potter