LONDON: Zinc climbed to the highest in more than a week on Wednesday on persistent concern about shortages and after Chinese steel futures rallied.
The zinc market is tight, with treatment charges (TC) at low levels, an indication that concentrate supplies are thin, said Robin Bhar, head of metals research at Societe Generale.
"I still think prices need to stay at this level to get more supply. Spot TCs are still low, they haven't picked up, so there's a need to incentivise more supply," he said.
Bhar said the broader market had found support after a correction in recent weeks when the lower prices sparked buying by industrial consumers.
"But I'm not getting carried away, I don't think we're going straight back up to the highs again, but we're at a new equilibrium after all that euphoria during LME Week," he said.
The index of the main industrial metals on the London Metal Exchange (LME) touched the highest in more than four years on Oct. 16, but over the following month shed 4 percent.
LME ZINC: Benchmark zinc on the London Metal Exchange failed to trade in official open outcry activity and was bid up 1.5 percent at $3,237 a tonne, its highest since Nov. 13. Prices have also broken above shorter-dated moving averages, sending a buy signal to trend-following funds.
STEEL RALLY: Zinc, mainly used for galvanizing steel, got support after Chinese steel futures rallied for a third straight session.
Sentiment on zinc was also bullish at the China Lead and Zinc Week gathering in Shenzhen, participants said.
ZINC DEFICIT: The global zinc market deficit widened to 39,800 tonnes in September from a revised deficit of 38,700 tonnes in August, data from the International Lead and Zinc Study Group (ILZSG) showed.
COPPER: LME three-month copper traded little changed at $6,911 a tonne in official rings, up $2 or 0.03 percent, after touching a two-week high of $6,957.50.
STRIKE: Southern Copper Corp said late on Tuesday that one of five unions for its workers in Peru had started an indefinite strike but that the stoppage had not affected normal operations at its mines.
NICKEL: LME nickel shed 0.9 percent to $11,765 a tonne in official trading, after posting gains of nearly 2 percent on Tuesday.
ANTAM: Adding to pressure on nickel was news that Indonesia's state-owned diversified miner PT Aneka Tambang Tbk (Antam) is targeting a 162 percent jump in nickel ore sales next year to 11 million tonnes from an estimated 4.2 million tonnes this year.
ALUMINIUM: LME aluminium rose 1 percent in official trading to $2,102 a tonne. "Turnover has picked up and aluminium is the only metal to register above average volumes this morning," Alastair Munro at broker Marex Spectron said in a note.
PRICES: Lead was bid down 0.4 percent in official activity at $2,469 a tonne and tin traded up 0.3 percent at $19,340.
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