LONDON: Zinc struck a four-year high near the USD4,000 mark on Friday and was on course for its biggest monthly climb since January as available stocks on the London Metal Exchange shrank, renewing investor concerns over tightness.
Benchmark LME three-month zinc was up 1.2percent at USD3,929 a metric ton in official open outcry activity, after earlier touching USD3,955, its highest since May 2022.
Zinc, used to galvanise steel, was poised for a 7.4percent gain in August, which would mark its strongest month since the start of the year. The LME is closed on Monday for a bank holiday in Britain. LME stocks data showed 19,125 tons of fresh zinc warrant cancellations, or orders to remove metal from warehouses, mostly in Singapore. That reduced available zinc stocks to 75,600 tons, or around two days of global consumption.
“If inventories continue to flow out … tight spot supply may continue to support zinc prices,” broker Marex said in a note. “However, if high prices attract large quantities of metal back into LME warehouses, the rebound in inventories could quickly alleviate tensions.”
The cash LME zinc contract was nearly USD200 a ton higher than the three-month forward, indicating near-term tightness. In China, however, Shanghai Futures Exchange zinc closed up only 0.1percent on Friday, with stocks edging down from the previous week but still relatively high at 153,669 tons. Chinese zinc exports have in part eased fears of a shortage outside the country.
SHFE copper stocks meanwhile plunged by 19.1percent to 72,428 tons. LME copper, also supported by low inventories lately, gained 0.6percent to USD14,365 a ton, within striking distance of its all-time peak of USD14,527.50. It was set for a ninth straight weekly gain and a monthly rise of 4.2percent. Traders are watching for clues on US monetary policy from Federal Reserve Chairman Kevin Warsh, who will address economists at Jackson Hole on Friday.
Aluminium added 0.2percent to USD3,240, lead slipped 0.3percent to USD1,910, nickel rose 0.6percent to USD16,975 and tin inched up 0.1percent to USD55,420.
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