* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

(Updates prices, adds aluminium inventories)

By Eric Onstad

LONDON, July 16 (Reuters) - Nickel prices surged to theirhighest in 11 months on Tuesday, propelled by buying fromspeculators and industrial consumers worried about potentialfuture shortages.

A key ingredient in batteries for electric vehicles (EVs),nickel could be subject to increasingly heavy demand with anexpected shift from diesel and petrol cars in the coming years.

"We've been hearing about consistent strong Western consumerbuying as the main driver of the price, probably related to EVnickel hedging requirements," said Nicholas Snowdon, metalsanalyst at Deutsche Bank in London.

Current estimates peg the future supply situation as lesscritical than forecasts from a year ago, but industrial buyersremain nervous about availability, Snowden said.

"The balance has softened from a sizeable deficit to closeto balance," he said. "But it's not a sudden swing back tosignificant surplus and ample availability, so I think there'sstill a concern over making sure that you have enough rawmaterials."

As nickel prices ramped up, buying from speculators extendedthe rally, one broker said. "It's CTA (commodity tradingadvisers) momentum buying ... that is pushing things (nickel)higher."

CTA funds often base trading decisions on chart patterns andtechnical levels, including momentum.

Benchmark three-month nickel on the London Metal Exchange(LME) CMNI3 had climbed 3.5% to $14,140 a tonne by 1400 GMT,its highest since last August.

Prices of nickel, mainly used in the stainless steelindustry, have also been boosted by worries of restricted oresupplies from major producer Indonesia because of a planned 2022export ban.

LME nickel has been the best-performing base metal this yearwith gains of 31% while most other base metals have fallen.

* RIO TINTO COPPER: LME copper CMCU3 added 0.5% to $6,010a tonne after Rio Tinto RIO.AX flagged a cost blowout of up to$1.9 billion and a delay of up to 30 months at its Oyu Tolgoiunderground copper mine in Mongolia, the miner's key growthproject. urn:newsml:reuters.com:*:nL4N24G40E

* ZINC/LEAD BALANCES: During the first five months of theyear the global zinc deficit increased to 123,000 tonnes from103,000 in the same period last year, data showed. The leaddeficit, meanwhile, rose to 42,000 tonnes from 34,000 tonnes. urn:newsml:reuters.com:*:nL8N24H263 urn:newsml:reuters.com:*:nL8N23R1XX

* ALUMINIUM STOCKS/ALUMINA: LME three-month aluminium CMAL3 lagged behind other metals, edging up 0.1% to $1,844 atonne after LME on-warrant aluminium inventories grew by 9% overthe past two days. MALSTX-TOTAL

China's June alumina output rose 5.4% to 6.41 milliontonnes, the aluminium raw material's highest in more than twoyears. urn:newsml:reuters.com:*:nB9N24900I

* PRICES: LME zinc CMZN3 gained 1.4% to $2,479, lead CMPB3 was up 0.7% at $1,994 and tin CMSN3 rose 0.2% to $17,935.

* For the top stories in metals and other news, click TOP/MTL or MET/L ($1 = 6.8759 Chinese yuan)

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Nickel has been outperforming other base metals so far this year https://tmsnrt.rs/2NYjurc

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Mai Nguyen in SingaporeEditing by Louise Heavens and David Goodman) ((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO ; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))

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