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Mounting LME inventories undermine zinc prices

Metal News - Published on Fri, 16 Mar 2018

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Reuters reported that zinc prices slipped as inventories in London Metal Exchange approved warehouses climbed, but support came from expectations of stronger demand in top consumer China. Benchmark zinc on the London Metal Exchange closed down 1.8 % at USD 3,226.5 a tonne. Prices of the metal used to galvanise steel are down about 10 percent since hitting USD 3,595.50 on February 15, their highest level since July 2007.

Ms Vivienne Lloyd Macquarie analyst said that “There is a shortage of galvanised steel in China. There should be a big restock in the second quarter,” adding that the zinc market this year would see a 500,000-tonne deficit.

Ms Lloyd said that “China’s steel industry was impacted by the winter cuts, production was weak and some operations had to close.”

Stocks of zinc in LME warehouses have jumped nearly 60 % since March 3 to 207,775 tonnes. Cancelled warrants - material earmarked for delivery and so not available to the market - account for about 8 % of stocks, down from nearly 50 % at the start of March

The country accounts for about half of global zinc demand, estimated at 14.4 million tonnes.

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Posted By : Rabi Wangkhem on Fri, 16 Mar 2018
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