LONDON: Zinc prices rose to their highest in four weeks on Monday as a rapid fall in the amount of metal available in the London Metal Exchange (LME) warehouse system added to fears of supply shortages.
Benchmark zinc on the LME was down 0.4% at $4,323 a tonne at 1607 GMT having earlier reached $4,435. The metal used to galvanise steel is up about 23% this year after rising 28% in 2021 and touching a record high last month.
“Zinc stocks are already very low,” said ING analyst Wenyu Yao. “There’s not much of a buffer.” Trading volumes were low, with Chinese financial markets closed for a public holiday until Wednesday.
STOCKS: On-warrant inventories of zinc in LME-registered warehouses fell to 78,125 tonnes, the lowest since May 2020 and down from about 130,000 tonnes in mid-March. SUPPLY: High energy prices have forced some zinc smelters in Europe to curtail production and Russia’s demand for payment for gas in roubles has raised fears of supply shortages or still higher prices.
UKRAINE: Germany said the West would agree to impose more sanctions on Russia in the coming days as nations around the world expressed outrage over civilian deaths in Ukraine.
CHINA: COVID-19 lockdowns could curb metals demand in China, but traders are hopeful of stimulus to support economic growth.
Analysts at ANZ said China’s coronavirus outbreak “has already led to a slowdown in the domestic movement of base metals” and production cuts at metal fabricators as a result.
REVIEW: The LME said it would commission an independent review into chaos in the nickel market last month. British financial regulators also said they would open a review.
COPPER: Chile’s copper production tumbled in February.
PRICES: LME copper was up 0.9% at $10,441 a tonne, aluminium fell 0.4% to $3,437, nickel gained 0.4% to $33,350, lead slipped 1.3% to $2,417.50 and tin was down 1.4% at $44,150.
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