* Copper touches three-week high
* LME/ShFE arb: bit.ly/2wZSAEz
* GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl (Updates with official prices)
By Eric Onstad
LONDON, May 22 (Reuters) - Lead prices touched the highest in 2-1/2 months on Tuesday on concern over potential shortages and as investors sold zinc and bought lead.
Environmental inspections at secondary lead smelters in China have reduced supply in recent months, analysts said.
"Lead's a tight market, and it appears that traders are quite actively shorting the zinc/lead ratio, which has been overstretched for a long time," said Oliver Nugent, commodities strategist at ING Bank in Amsterdam.
The ratio of zinc to lead - which is often traded because the two metals are usually found in the same ore bodies - has slid to 1.25, the lowest since December, after touching 1.39 in April and March, the highest since 2007.
Nugent said he was wary of the rally due to heavy speculation in China.
"There's a lot of speculation in this Shanghai lead rally, a lot of froth coming in to chase this up. My worry is they don't stick around for long," he said.
* LME LEAD: Benchmark lead on the London Metal Exchange gained 2 percent to $2,458 a tonne in official open outcry trading after touching $2,468, the highest since March 2.
* SHANGHAI LEAD: Lead on the Shanghai Futures Exchange jumped as much as 3.6 percent to the highest since October at 20,465 yuan a tonne.
* CRACKDOWN: "Authorities are clamping down on recycling plants in China, which are the source of nearly 60 percent of lead," ANZ said in a note.
"The closures come amid a widening import arbitrage into China and falling inventories on both the LME and ShFE," it said.
* ZINC: LME zinc, untraded in official rings, was bid down 1.7 percent at $3,051 a tonne, hit as traders sold the zinc/lead ratio, Nugent said.
* COPPER: Three-month LME copper was bid up 1.2 percent in official activity at $6,960 a tonne after hitting $6,976, the strongest since April 26.
Copper has been lifted due to buying in the Far East as well as by Commodity Trader Advisor (CTA) funds, Alastair Munro at broker Marex Spectron said in a note.
* PROTESTS: Copper was also supported after violent protesters demanded that conglomerate Vedanta Resources shut a copper smelter over environment hazards to the area.
* NICKEL: LME nickel was bid up 0.6 percent at $14,760 a tonne. It was the largest speculative long of the LME complex at 12.2 percent of open interest, according to Marex Spectron estimates.
* PRICES: Aluminium traded down 0.3 percent in official rings at $2,274 a tonne and tin traded unchanged at $20,700. ($1 = 6.3765 Chinese yuan renminbi)
Additional reporting by Naveen Thukral in Singapore Editing by Alexandra Hudson and Adrian Croft