LONDON, Nov 22 (Reuters) – Zinc rose on Thursday on persistent supply tightness while copper steadied as investors weighed a weaker U.S. dollar against worries about a looming global growth slowdown and escalating Sino-U.S. trade tensions. The premium for the zinc cash contract over the three-month contract  touched a 21-year high of $97 a tonne on Tuesday due to falling stocks in London Metal Exchange (LME) warehouses. It was trading at $94.50 on Thursday. At  123,500 tonnes, LME stocks have roughly halved since mid-August. „There’s clearly not a lot of metal in the system so the price is responding to those signals of extreme tightness,” said Vivienne Lloyd, analyst at Macquarie. “We’re friendly towards zinc, have been for a while. It’s got an underlying bearish case but on a two-, three-, four-month basis it’s quite a tight metal market. I wouldn’t say that’s entirely priced in at this stage.”

In the wider markets, global equities wilted as investor worries mounted about growth slowing in the face of rising U.S. interest rates and trade tensions. The dollar fell, however, making dollar-priced metals cheaper for non-U.S. investors.

China, the world’s top metals user, rejected fresh U.S. accusations of perpetuating “unfair” trade practices and urged Washington to stop making provocations, showing little sign of backing down a few days ahead of a high-stakes meeting between leaders of both countries.

PRICES: Zinc rose 0.4 percent to $2,577 a tonne at 1526 GMT, extending Wednesday’s gains and clocking up an increase of around 3.5 percent so far this month. Copper edged up 0.2 percent at $6,245 a tonne, notching up gains of around 4 percent this month.

TECHNICALS: Zinc faces major resistance at the November high of $2,647, while copper faces major resistance at its November high of $6,315, broker Marex Spectron said in a note.

POSITIONS: Traders are keeping a close eye on positions holding large amounts of LME copper warrants and cash contracts, which are causing jitters about nearby availability. <0#LME-WHC>

ALUMINIUM SUPPLY: Xinfa Group, one of China’s top aluminium smelters, will not have to cut metal production in its home city of Liaocheng this winter and will only have to reduce alumina output by 10 percent for two months.

STEEL: China’s steel sector is toying with falling into a bear market, with prices down almost 20 percent in the past three months as a run of record production meets the reality of a slowing economy and trade disputes.