LONDON, Nov 26 (Reuters) - Zinc prices fell for a second day
on Monday as expectations of weaker demand from Chinese steel
mills overpowered signs that the market is short of metal. 
    Other industrial metals also fell amid caution over the
outcome of trade talks between U.S. President Donald Trump and
Chinese President Xi Jinping later this week that could
influence demand for commodities.             
    Benchmark three-month zinc on the London Metal Exchange
(LME)         was down 1.4 percent at $2,485.50 a tonne at 1136
GMT after falling 2.4 percent on Friday. 
    The metal used to galvanise steel was under pressure after
demand concerns drove Chinese steel prices down more than 5
percent to a five-month low.             
    Zinc fell 2.5 percent on the Shanghai Futures Exchange
(ShFE)         , its biggest one-day fall since August. China is
the biggest consumer of zinc and other industrial metals.
    But prices are supported by stockpiles at 10-year lows and
shortages of immediately available metal, said ING analyst
Warren Patterson.
    "Fundamentals (for zinc) are constructive, at least in the
short term," he said.
    
    ZINC SPREAD: The premium of cash zinc to the three-month
contract at $91.50 MZN0-3 remains close to last week's
two-decade high of $97. A premium suggests a shortage of nearby
supply. 
    STOCKS: Stocks of zinc in LME-registered warehouses have
halved to 121,550 tonnes since August to ten-year lows, while
inventories in ShFE warehouses at around 35,000 tonnes are down
from almost 160,000 tonnes in March. MZNSTX-TOTAL ZN-STX-SGH
    TECHNICALS: Zinc has fallen below its 50- and 100-day moving
averages, worsening its technical picture. 
    SPECULATORS: Speculative investors are neutral on zinc, with
brokers Marex Spectron estimating their net short position at
1.4 percent of active contracts.
    DEFICIT: The roughly 13.5 million tonne a year zinc market
had a 305,000 tonne deficit over January-August, according to
the International Lead and Zinc Study Group.
    SUPPLY: Zinc prices have fallen 30 percent from a February
high as investors anticipated a surge in refined zinc output
after a clutch of new mine openings. 
    But delays in that new supply due to bottlenecks at smelters
across Asia have put a floor under prices, helping them recover
from an August low of $2,283 a tonne.             
    CHINA GROWTH: Economic growth in China is expected to hit
6.6 percent this year and slow to 6.3 percent in 2019,
economists from Beijing's Renmin University said.