* LME zinc up 30 pct so far this year
* Biggest quarterly rise of metals since 2010
* Copper on track to end quarter flat, seen falling (Adds comment, detail, rewrites throughout)
By Melanie Burton
MELBOURNE, June 30 (Reuters) - London zinc was on track to be the best performer of base metals for the second quarter on Thursday, set for its biggest quarterly rise in nearly six years as a dearth of new mine supply starts to tighten global supplies of the metal.
“Zinc has tightened, looks tight, and may tighten further,” said analyst Lachlan Shaw of UBS in Melbourne.
The closure of large mines such as Century in Australia and Lisheen in Ireland has cut concentrate feed to smelters. But as prices rise, mine capacity that was shuttered as prices slumped to six-year lows last year can be brought back, Shaw said.
“Prices can’t go up dramatically higher. Glencore is doing its best to bring rationality into the market, but eventually there will be a price at which it will bring curtailed capacity back.”
The global miner-trader in December said it would cut some 500,000 tonnes of annual zinc production, or 4 percent of global supply.
LME zinc on Thursday struck its loftiest in 11-1/2 months at $2,116 a tonne, trading last at $2,096 a tonne, a gain of 0.4 percent. Year to date, prices have rallied by 30 percent.
It is on target for the biggest yearly rise for any of the metals since the height of the commodities boom in 2010 that saw copper and nickel end the year up around 30 percent and tin rally nearly 60 percent.
Across other metals, LME nickel was a solid performer as China’s stainless steel mills used more refined nickel, after plants producing a cheaper, lower nickel alternative went bust. LME nickel was set for 11 percent quarterly gains, followed by LME aluminium with a 7 percent quarterly rise.
Laggard LME copper was the worst performer of the set, poised to finish flat, and expected by many to fall from here.
“A majority of investors are bearish towards copper on a supply growth story,” added Shaw. UBS expects copper prices to fall below $2 a pound to drive modest rebalancing in the market.
Still, LME copper struck $4,865, its most expensive since May 5, before trading at $4,830 a tonne by 0755 GMT, down 0.2 percent.
Shanghai Futures Exchange copper ended up 0.8 percent at 37,500 yuan ($5,646) a tonne.
China’s economy rebounded in the second quarter, with capital expenditures recovering from 5-year lows, a private survey showed on Thursday, as higher government spending helped boost the property and construction sectors.
Elsewhere, Malaysia announced on Thursday it was extending a moratorium on bauxite mining by two months to Sept. 14, as existing stockpiles remain high.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin ($1 = 6.6422 Chinese yuan) (Reporting by Melanie Burton; Editing by Joseph Radford and Jacqueline Wong)