* Zinc, aluminium rallies unlikely to be sustained - Citi
* Aluminium cash prices reach highest vs benchmark since 2012
London zinc prices jumped to their highest level in almost three years on Monday amid prospects of falling mine supply, while copper prices steadied after four weeks of gains.
Given a generally brightening outlook for global demand, investors have been allocating funds to commodities that are expected to be in tight supply.
Zinc prices in both London and Shanghai have jumped more than 4 percent this month, while London copper and aluminium futures have climbed by more than 2 percent over the period.
"There is a structural story that people seem to buy into on zinc because we are losing supply in closures of huge mines such as (Australia's) Century. Then you have the technical signals which are also bullish," said analyst Dominic Schnider of UBS Wealth Management in Singapore.
Century mine is the world's second largest zinc mine, and is scheduled to run dry in three years. It yielded 105,279 tonnes of zinc in the first quarter, down 31 percent from the previous quarter and 21 percent on a year ago. [ID:nL3N0DH0G6]
Zinc futures on the London Metal Exchange (LME) rose to $2,325 a tonne, the loftiest since August 2011. Prices could target $2,450 in the short to medium term, Schnider said.
Shanghai zinc ended up 0.9 percent at 16,410 yuan
($2,600) a tonne, having earlier reached 16,550 yuan a tonne - the highest since February 2013.
But uncertain demand from China, the world's top consumer of most commodities, is expected to cap gains in metal prices
"Sluggish growth in galvanised steel sheet production in China year to date ... and subdued Chinese construction do not support a bullish demand picture," Citi said in a research note.
"We expect a short-term correction and as such we forecast zinc to trade at around $2,000-2,200/t on a 3-6 month view."
Markets will be watching for China's money supply figures this week which may flag an improvement in factory activity in the coming months.
China's fiscal expenditure surged 26.1 percent in June from a year earlier to 1.65 trillion yuan ($265.84 billion), reflecting government efforts to speed up spending to shore up the economy.
China's GDP and industrial output figures on Wednesday this week will also give fresh direction.
LME copper was barely changed at $7,150 a tonne by 0723 GMT, after ending marginally higher last week. The most-traded September copper contract on the Shanghai Futures Exchange slipped by 0.2 percent to 50,670 yuan a tonne.
Reflecting improved investor appetite for copper, hedge funds and money managers raised their bullish bets on copper futures and options in the week to July 8, according to data from the Commodity Futures Trading Commission. In aluminium, prices have been driven by scant spot market supplies, which propelled cash prices to the highest against the benchmark since December 2012 on Friday .
LME aluminium was up slightly at about $1,946 per tonne, after rising for the past two weeks.
Higher cash prices will curb marginal profits for some financing deals that have locked metal away from the market, suggesting more stocks may be delivered to LME inventories.
"Producer selling appears to have capped the recent rally," Citi said. "We now see little prospect of prices now sustaining upside moves outside a $1,850-$1,950/t price range in H2."