CME, with JPM nod, to launch zinc contract amid market share battle

NEW YORK, May 18 (Reuters) - CME Group Inc said Monday it would launch a physically delivered zinc futures contract next month, stepping up a global battle for metals market share with the London Metal Exchange amid expanding Asian markets.

CME's announcement, which included a statement from JP Morgan Chase & Co that expressed strong support for the move, said the new zinc contract will begin trading June 29. The first available delivery was targeted for October, pending regulatory reviews, CME said.

The statement did not explain JPMorgan's role in the zinc contract. A CME spokesman said the Wall Street bank, which sold most of its physical metals trading business last year, had "expressed an interest in participating in promoting the launch of the new contract."

CME's unexpected announcement comes just ahead of the LME's annual Asia week conference, hosted by parent Hong Kong Exchanges & Clearing's.

While CME's copper contract has made significant gains over the LME's largely due to growing volume during Asian trading hours, its Midwest aluminum futures contract has failed to gain much liquidity since its launch a year ago.

"We're pleased that CME Group has responded swiftly and decisively to industry feedback for a new and transparent North American benchmark for zinc," Michael Camacho, co-head of global commodities at JPMorgan, said in the CME statement.

The futures will be priced in U.S. dollars and each contract will represent 25 tonnes.

CME said warehousing firms C. Steinweg, Inc., Henry Bath LLC and Dearborn Distribution Services had applied to become delivery locations for the contract in the Baltimore, New Orleans, Chicago and Detroit regions.

(Reporting by Luc Cohen; Editing by Bernadette Baum)