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Zinc Prices Slide as Chinese Supply Rises

Metal News - Published on Mon, 08 Jul 2019

Image Source: Reuters
Reuters reported that Zinc prices fell to their lowest in two weeks as rising Chinese production and a collapse in the premium for cash metal on the London Metal Exchange pointed to a better supplied market. Benchmark zinc on the LME ended down 1% at USD 2,425 a tonne, within a whisker of last month’s level of USD 2,412, the lowest in 5 and 1/2 months.

The metal used to galvanize steel has tumbled more than 30% from a high early last year as a US-China trade war weakened the demand outlook and traders braced for a surge of refined metal to end a supply shortfall.

Deutsche Bank analyst Mr Nick Snowdon said that rising Chinese output, rumours that zinc is moving from Chinese bonded storehouses into the LME warehouse system and a big fall in the premium for LME cash zinc were pushing prices lower. He said that “You could see more downside to the low USD 2,000s adding that prices were unlikely to fall much lower because of the low level of warehouse stocks.”

Higher output by Chinese smelters is expected to end a deficit that according to the International Lead and Zinc Study Group amounted to 97,000 tonnes during the first four months of this year.

Chinese refined zinc output at 480,000 tonnes was up 7.4% in May compared to the same month in 2018.

Source :

Posted By : Ratan Singh on Mon, 08 Jul 2019
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