Lead and zinc motored higher on the London Metal Exchange (LME) on Wednesday, spurred by news workers at Tara Mines, Europe's biggest zinc mine, plan to down tools for three days starting June 1 in a strike that management says will lead to the suspension of operations.
Lead hit its highest since early March, while zinc touched highs last seen at the beginning of April amid speculative buying that triggered buy-stops. Both metals ended near their peaks, although resistance was seen in the mid-$850s for lead and near $1,100 a tonne in zinc.
"This is a big mine, and it (the news) is affecting both markets as concentrates are pretty tight at the moment," Angus MacMillan of Prudential-Bache said.
Some 220 workers at the mine, 40 miles (64 km) north of Dublin and bought by Sweden's Boliden from Finnish group Outokumpu last year, are taking the action in a dispute over welfare issues, union leaders said on Wednesday.
The mine accounts for 200,000 tonnes of zinc a year, and around 40,000 tonnes of lead.
Last lead trade was at $850, up $15 from Tuesday's kerb close, while zinc ended at $1,090, a $25 advance.
Fundamentally robust tin continued to probe higher, hitting $9,550 at one stage, its highest since August 1989, with LME stocks falling by 445 tonnes, leaving a total of just 3,025 in warehouses.
"That (445 tonnes) may not seem like a lot, but it's more than 13 percent of the total. Tin is extremely strong and we could see five digits on it pretty soon," Man Metals said in a daily report.
Prices closed the session at $9,450, up $120, while the cash/threes backwardation, dormant in recent sessions, widened to $550/600 from $450/470, reflecting the upcoming tightness for the June date.
A supply squeeze has been growing steadily in recent months as stocks held by producers, consumers and on the LME have dwindled rapidly in the face of firm demand and lower availability.
Other metals were generally aided by dollar weakness, leaving the market a cheaper buy for euro holders. The dollar slipped to its lowest in nearly three weeks against the euro and yen as investor concern about high oil prices and their impact on the US economy kept the dollar on the defensive.
Copper was unable to hold above $2,700, and appears constrained by consumer buying on price dips and profit-taking above that level. Last trade was at $2,688, still up $9.
Aluminium cleared the $1,650 chart level and notched up a $21 gain, but nickel shed $75 to $11,675.
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