SYDNEY, Dec 12 (Reuters) - Shanghai base metals futures were mostly higher on Tuesday amid signs that supply cuts linked to an environmental crackdown by Beijing will lead to greater import demand. China issued an "action plan" in 2013 to reduce pollution caused by industrial plants, followed by provincial contracts and further policies. This included the so-called 2+26 Plan,
which forces aluminium, steel and other industries across 28 cities to curtail production during the winter heating season from mid-November to March. Hebei, China's biggest steel-producing region, was ordered to cut concentrations of hazardous airborne particles known as PM2.5 by 25 percent by the end of this year, as well as cut steel capacity by 60 million tonnes and coal consumption by 40 million tonnes. UBS in a strategy paper on the sector said it sees China's focus on reducing air, land and
water pollution to be a major driver for commodities. "In our opinion, the next four weeks are particularly important as December is typically the most polluted month of the year," UBS said. FUNDAMENTALS * The most-traded copper contract on the Shanghai Futures Exchange rose 1.2 percent
to 52,200 yuan ($7,888.18) a tonne. * Three-month copper on the London Metal Exchange was down 0.4 at $6,641 a tonne, as of 0158 GMT, after gaining 1.5 percent in the previous session. * LEAD RISES: ShFE lead jumped as much as 2.7 percent to its highest since Oct 18,
while zinc climbed 1.3 percent to a one-week peak of 2,5220 yuan. * TIN SOLE LOSER: Bucking the trend, ShFE tin retreated 1.1 percent in light volumes. * ZINC STOCKS: Headline zinc stocks in LME-approved warehouses MZNSTX-TOTAL fell by 1,700 tonnes to 199,425 tonnes, their lowest since November 2008. However, cancelled warrants - metal earmarked for delivery - stood at 18 percent of total stocks, down from 50 percent three months ago. * CANADIAN BOOST: Canadian developers of cobalt and lithium mines stand to benefit from a round of investments from the makers of electric vehicles and the batteries powering them, a
potential game-changer for small miners short on money to develop deposits of these critical battery ingredients. * DOLLAR UP: The dollar held steady near a recent two-week high versus a basket of major
currencies on Tuesday, with traders awaiting the U.S. Federal Reserve's policy meeting this week
for fresh catalysts.
