LONDON, Jan 5 (Reuters) – Zinc hit its highest in more than a decade on Friday as concerns over market tightness persisted, while copper dipped following strong gains last month as Chinese investors grew cautious on the metal’s prospects. Zinc stocks held in London Metal Exchange warehouses fell 250 tonnes to their lowest since late 2008, data showed on Friday, down by about a third from their October peak. The global zinc market deficit widened to 36,900 tonnes in October from a revised deficit of 35,900 tonnes in September, the latest industry data show. “We’ve always seen Q1 2018 as the peak of the zinc rally and were looking previously for $3,400/t. Zinc has got very strong momentum, it’s entirely possible it could pierce that level on a three to six month basis,” said Macquarie analyst Vivienne Lloyd. She added, however: “Zinc supply is slowly coming back and the greater length of time zinc displays a large price disparity to aluminium the more likely we’ll see substitution.”FUNDAMENTALS: * ZINC PRICE: Three-month LME zinc stood at $3,374 a tonne by 1114 GMT, having hit its highest since August 2007 at $3,375. * TECHNICALS: Indicating near-term market tightness, the premium for cash over the three-month contract CMZN0-3 was at $22.50 a tonne, against a $10.25 discount on Dec. 20.  * COPPER PRICE: Copper slipped 0.5 percent to $7,152.50 a tonne, after gaining 7 percent in December. People outside China are positive about the country but Chinese investors  are more cautious, said Lloyd. “They’re cautious about infrastructure (investment), and the government’s direction (in general), there’s actually not a lot of visibility on (Beijing‘s) intentions at the moment,” she said. * CHILE: Unionised workers at Glencore Plc’s Lomas Bayas copper mine in Chile rejected a final contract offer and began government-facilitated mediation on Thursday to avoid a strike. * CHINA: A blizzard of data in coming weeks is expected to show China’s economy ended a strong 2017 on a slightly softer note, but activity has likely remained more resilient than expected despite a punishing crackdown on industrial pollution and a cooling property market. * WIDER MARKETS: World stocks scaled fresh record highs on Friday after more data pointed to the strength of the United States, the world’s largest economy, while the dollar was stuck near four-month lows before crucial payroll numbers. * STEEL BAN: China will continue to “unswervingly” cut existing steel capacity and strictly ban the launch of any new steelmaking facilities in 2018, its government said this week.