LONDON: Zinc rose on Friday on concern about shortages after inventories slid, but some other industrial metals were softer after factory activity in top metals consumer China contracted.
Zinc mines have been ramping up, but smelters have not been able to keep up, so shortages of refined metal have persisted.
"Most if not all Western smelters are probably working flat out, but in China, with the environmental scrutiny clampdown, capacity is being cut and new capacity has been delayed," said Robin Bhar, head of metals research at Societe Generale in London.
"The deficit in the refined market is being met by the drawdown in stocks, so that's lending a lot of support to the zinc price."
On-warrant zinc inventories in warehouses registered with the London Metal Exchange, material that is not earmarked for delivery, fell to 46,000 tonnes this week, LME data showed. That was the lowest since at least 1998, having more than halved so far this year.
Benchmark LME zinc rose 0.2 percent to $2,784.50 a tonne in closing open outcry activity after climbing 13 percent so far this year.
* CHINA PMI: Some metals were pressured after China's factory activity contracted for a third straight month in February albeit at a slower pace, helped by improvements in domestic manufacturing, a private survey showed on Friday.
"There's still a lot of caution because of trade tensions, China slowing and physical premiums are tracking sideways," Bhar said.
* COPPER: Three-month LME copper shed 0.5 percent to end at $6,478 a tonne.
* COPPER STOCKS: Earlier this week, available LME copper stocks fell to 21,600 tonnes, their lowest since 2005.
"The fact that spreads are not insanely backwardated at these levels of stocks tells you that there is some metal around but it isn't necessarily on the LME," said Guy Wolf, head of global market analytics at Marex Spectron.
The backwardation - the premium of cash copper over the three-month LME contract was at $44 a tonne on Friday, compared to a discount of $23.25 a month ago, but far from a peak premium of $149 seen in 2012.
* PREMIUMS: China's Yangshan copper import premium fell to as low as $48 a tonne, the lowest since April 2017, suggesting weak physical demand.
* NICKEL: LME nickel, used to make stainless steel, finished up 1.1 percent at $13,195 a tonne after touching a six-month peak of $13,400, tracking the surging Chinese ferrous complex.
* PRICES: Aluminium added 0.4 percent to close at $1,918 a tonne, lead fell 0.4 percent to $2,143 and tin dipped 0.1 percent to $21,620.
Comments
Comments are closed for this article.