LONDON: Zinc prices rose on Tuesday after miner and trader Glencore held its output forecast steady for next year, disappointing investors who had largely bet it would restart more capacity.
Glencore told an investors presentation it would restart its Lady Loretta mine in the first half of 2018, but added that it expects zinc output to fall slightly to about 1.09 million tonnes from 1.1 million tonnes this year.
In 2019, Glencore sees its zinc output creeping up to 1.16 million tonnes.
"Based on their guidance numbers it does remain fairly constructive for zinc. The market was expecting more of an immediate supply increase," said ING commodities strategist Warren Patterson.
However, he added that ING expects overall global zinc supply to increase next year, with the addition of capacity coming online in Australia and South Africa.
ZINC: London Metal Exchange zinc ended up 1 percent at $3,157 a tonne.
LEAD: Seasonally strong demand from battery makers, tight supplies caused by mine shutdowns and dwindling LME inventories are expected to sustain lead prices, which recently hit six-year highs.
Lead, which is mined alongside zinc, closed up 1.2 percent at $2,517.
DOLLAR: The US currency rose to three-week highs against a basket of currencies as the Federal Reserve begins a two-day policy meeting widely expected to result in a hike in interest rates.
A strong US currency makes dollar-priced priced metals costlier for non-US investors.
GLENCORE COPPER: Glencore said its expects to produce 150,000 tonnes of copper next year and 300,000 tonnes in 2019 at its Katanga mine in the Democratic Republic of Congo. The mine has restarted after a suspension dating back to 2015.
CHINA ECONOMY: Vehicle and loans data from China, which accounts for about half of global consumption of industrial metals, on Monday pointed to improved consumer confidence.
"There is as yet little evidence of the government's deleveraging attempts given that lending has also risen sharply since the beginning of the year," Commerzbank said in a note.
Comments
Comments are closed for this article.