Zinc stocks in London Metal Exchange-registered warehouses currently stand at 59,200 tonnes, their lowest since October 2007 <MZNSTX-TOTAL>.
Prices "have moved higher on the potential for supply disruptions and very low inventory levels," Standard Chartered said in a note.
Floods in Australia's Queensland state last month have disrupted rail delivery of zinc exports to the northern port of Townsville, affecting miners, including Glencore, MMG Ltd and South 32.
Townsville port ships about 40 percent of Australia's zinc production, equal to about 700,000 tonnes a year or 5 percent of global supply.
FUNDAMENTALS
* LME ZINC: Three-month LME zinc rose as much as 0.4 percent to $2,848.50, its highest since July 2, and was up 0.1 percent at $2,840, matching the previous session's high, as of 0708 GMT.
* SHFE ZINC: The most-traded May zinc contract on the Shanghai Futures Exchange climbed as much as 2.5 percent to 21,980 yuan ($3,277.91) a tonne, the highest since April 2, 2018, before closing up 2 percent.
* ZINC SPREADS: The premium of cash zinc over the three-month LME contract <CMZN0-3> stood at $52 a tonne on Tuesday, the highest since Jan. 7, underscoring tight near-term supply for physical metal.
* OTHER METALS: Benchmark LME copper edged down 0.3 percent to $6,454.50 a tonne as the dollar firmed slightly, while ShFE copper closed up 0.2 percent at 49,340 yuan a tonne. Nickel was the laggard, slipping 0.9 percent in London and 0.8 percent in Shanghai.
* COLUMN: Funds start buying into the copper recovery story: Andy Home
* CHINA VAT: China's metal traders are betting that recently announced manufacturing tax cuts will start in May and are placing trades that pay off as prices diverge between the April and May contracts.
* TRADE: The United States and China may be in the final weeks of discussions to hammer out a deal to ease their tit-for-tat tariffs dispute, U.S. Trade Representative Robert Lighthizer said on Tuesday.
* RUSAL: Russian aluminium producer Rusal plans to launch the second line of its Boguchansk aluminium smelter in Siberia at the end of this month.
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MARKETS NEWS
* Asian shares drifted lower as a risk-off mood settled on markets.