BEIJING - Shanghai zinc soared as much as 6 percent to a one-week high on Thursday after data showed a year-on-year drop in Chinese production and the London Metal Exchange (LME) zinc price posted its biggest daily jump in almost a year.

The metal, used to galvanise steel, had fallen by around 23 percent in London in June and July amid fears of oversupply before short-covering kicked in on expectations that the sell-off was overdone.   

FUNDAMENTALS

SHANGHAI ZINC: The most-traded September zinc contract on the Shanghai Futures Exchange hit the daily upside limit of 6 percent in early trade, touching its highest since July 10, and was up 4.9 percent at 21,405 yuan ($3,183.33) at 0157 GMT.

LME ZINC: Three-month zinc on the LME rose as much as 2.1 percent to $2,655 a tonne, extending a 3.5 percent gain on Wednesday, its biggest daily jump since last August, before easing back to $2,608.

CHINA: China's June zinc output fell 5 percent year-on-year to 475,000 tonnes, the National Bureau of Statistics said on Wednesday.

TECHNICALS: Indicating near-term supply tightness in zinc, LME cash zinc traded at a premium of $31 a tonne to the three-month price , up from an $8.50 premium on July

OTHER METALS: All other base metals were trading higher with the exception of London nickel, which edged down 0.3 percent. Copper added 0.9 percent in Shanghai and 0.4 percent in London, but zinc's sister metal lead was the next best performer, jumping 1.7 percent in Shanghai.

COPPER: Three senior executives at Jiangxi Copper Co, one of China's biggest copper producers, have left their roles, the company said in a stock exchange filing on Wednesday, in a major managerial shake-up at the state-run firm.  

ALCOA: Aluminium producer Alcoa Corp lowered its forecast for adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for 2018 on Wednesday, citing U.S. tariffs on imported aluminium and rising energy costs.

MARKETS NEWS   

Asian shares made early gains on Thursday as upbeat Wall Street earnings supported global investor sentiment, although trade war jitters pushed China's offshore yuan to a fresh one-year low.              

(Reporting by Tom Daly; editing by Richard Pullin)

© Reuters News 2018