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(Bloomberg) -- Zinc burst above $3,000 a metric ton in London amid persistent global deficits and aluminum scaled new heights as China reined in illegal capacity in the world’s largest user, adding fresh impetus to a base metals rally even as some investors expressed doubt about the outlook.

Zinc surged as much as 2 percent to $3,018 a ton on the London Metal Exchange, the highest level since 2007, and traded at $3,016 at 8:46 a.m. in London. Aluminum gained as much as 1.2 percent to $2,074 a ton, the most since November 2014, while nickel, copper and lead all traded higher.

Base metals rallied to 32-month high last week, as tracked by the LMEX Index, amid better-than-expected demand in China and a weakening dollar. The Chinese government is stepping up moves to shut illegal plants this year, both to cut excess capacity and strengthen efforts to protect the environment. That’s aided zinc and lead, while also benefiting aluminum.

“The bullish sentiment is still there and strong,” said Jia Zheng, an analyst at Shanghai Minghong Investment Co. “Prices are likely to be range-bound at current high levels. For the next step, investors will wait till the peak season comes to give a clue on real demand strength,” said Jia, referring to autumn.

Zinc rallied 60 percent last year as worldwide demand topped supply after producers including Glencore Plc suspended some output. In the first five months of 2017, there was a global deficit of 181,000 tons, according to the World Bureau of Metal Statistics.

China Hongqiao Group Ltd., the nation’s top aluminum smelter, confirmed on Tuesday it’s cut 2.68 million tons, or 29 percent, of annual capacity after orders from the central government. UBS AG raised its near-term aluminum forecast to 95 cents a pound, or $2,094 a ton, for the fourth quarter of 2017 and first quarter of 2018, according to a note received on Wednesday.

The rally in metals has some investors warning of a pullback. Hedge fund manager Crispin Odey is shorting metal stocks in anticipation of slowing growth in China. “China’s economy in a year’s time will be much weaker than it is now,” Odey, whose London-based firm manages about $6 billion, said in a phone interview.

To contact Bloomberg News staff for this story: Winnie Zhu in Shanghai at wzhu4@bloomberg.net.

To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net, Jake Lloyd-Smith

©2017 Bloomberg L.P.

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