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Zinc Prices to Continue Falling In 2019

Metal News - Published on Mon, 15 Jul 2019

Image Source: Small Caps
Small Caps reported that zinc prices have been sliding since April and look set to fall even more amid concerns of an approaching market oversupply. Prices on the London Metal Exchange sunk to a six-month low of USD 2,371 per tonne on Tuesday, down a further 1.3% from Monday’s closing price of USD 2,403 per tonne. The price slid under the early January low of USD 2,460 per tonne and is getting troublingly close to last year’s mid-September price of USD 2,285 per tonne.

Zinc on the Shanghai Futures Exchange also hit its lowest point since January of 19,190 yuan per tonne, keeping pace with the metal’s descent on the LME.

The year 2019 started with the zinc sector in deficit due to rapidly depleting zinc mine reserves and minimal funds being invested into finding new reserves.

Zinc stocks on the LME had just emerged from 10-year lows in the December 2018 quarter and prices were up slightly on this tight supply, coupled with increased consumption.

However, at around USD 2,500per tonne, zinc wasn’t nearly as high as early 2018, where it reached more than USD 3,500 per tonne.

The falling price has been rationalised by analysts as an indication of a better supplied market, signalled by rising Chinese production and a collapse in the premium for cash metal on the LME.

According to Deutsche Bank analyst Nick Snowden, rumours that zinc is moving from Chinese bonded storehouses into the LME warehouse system is also pushing prices down. He said that “You could see more downside to the low USD 2,000s.”

However, Mr Snowden added that prices were unlikely to fall much more because of the depressed level of warehouse stocks.

Source :

Posted By : Rabi Wangkhem on Mon, 15 Jul 2019
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