Zinc touched a fresh a 10-year high on Friday due to a weaker dollar and as inventories slipped to their lowest levels since 2008, indicating tight supply. Benchmark LME zinc ended 0.4 percent higher at $3,478 per tonne, after touching its highest since 2008 at $3,481.85. It recorded its seventh straight week of gains, the longest weekly winning streak since early 2016.
ING commodities strategist Oliver Nugent said there was a tightness in supply of zinc, boosted by a rise in cancelled warrants - metal earmarked for delivery - in the LME approved warehouses. "We have had so much support this week from the dollar, it's all eyes on the dollar," he said, referring to the weaker US currency.
Fears over potential supply shortages and another drop in on-warrant inventories available to the market are helping to support the price of zinc. Zinc, used primarily to galvanise steel, is up about 14 percent since a December low. It rose 29 percent in 2017.
LME inventories have tumbled about 58 percent over the past 12 months to 178,025 tonnes after closures and suspensions of big mines in recent years. Headline stocks are at their lowest since November 2008. Data from China on Thursday showed December imports of refined zinc jumped 59 percent year-on-year.
The dollar index was set for its biggest monthly fall in nearly two years as comments by senior US officials this week backing a weak dollar reverberated through currency markets. A weaker dollar makes commodities priced in the greenback cheaper for buyers using other currencies.
Three-month copper fell 0.7 percent to $7,085 per tonne but ended 1 percent higher on the week. On-warrant copper stocks, those not earmarked for delivery, have shot up 70 percent since Jan. 17 to 258,675 tonnes. Nickel inched up 0.3 percent to $13,650 per tonne and ended the week 8 percent higher on the week. This is the biggest weekly jump since early November.
Freeport-McMoRan Inc said it was edging closer to a permit deal with Indonesia for its massive Grasberg mine, but the world's second-biggest copper producer said that it had not yet struck any formal agreements. What does looming US-China trade showdown mean for aluminium? Aluminium gained 0.7 percent to $2,257 per tonne, lead dropped 0.5 percent to $2,593, and tin finished 1 percent higher at $21,600 after hitting its highest since Nov. 2016.
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