LONDON: Lead hit its highest in 6-1/2 years on Thursday, catching up with sister metal zinc after harsh weather in the United States and China hit supply and as Beijing continues to restrict output on environmental grounds.
London Metal Exchange (LME) lead hit $2,667.50, its highest since July 2011 at one point and was up 1.5 percent in official midday rings at $2,650.
Zinc, mined alongside lead, traded down 0.2 percent in rings at $3,532, having surged to its highest in 10-1/2 years on Monday.
“Everyone has been concentrating on tightness in zinc but actually lead has been particularly tight as a result of the harsh winter in North America and China which fuels battery demand,” said Alistair Munro, analyst at Marex Spectron.
“Also, secondary supplies of lead in China are coming under scrutiny as a result of environmental measures.”
Stocks of lead on the LME have slumped by around 7 percent since early January to a three-year low below 135,000 tonnes.
FUNDAMENTALS
CHINA DEMAND: Growth in China’s manufacturing sector remained elevated in January, a private survey showed on Thursday, though it contrasted with an official survey on Wednesday pointing to a slight loss of momentum.
ASIA FACTORIES: Asia’s factories got off to a strong start in 2018, with manufacturing activity in many countries hitting multi-year highs as global demand for hi-tech products remained strong.
ZINC TECHNICALS: Indicating nearby tightness in zinc, LME data showed one entity holds more than 90 percent of warrants, cash and “tom” positions. Also, cash zinc was trading at a $55.50 a tonne premium to the three-month price.
COPPER SUPPLY: Glencore said its copper output in 2018 should rise to nearly 1.5 million tonnes as its Kabana mine in Democratic Republic of Congo ramps up.
NICKEL SUPPLY: Japan’s Sumitomo Corp said it has resumed production at the Amatory nickel-cobalt project in Madagascar from end-January after halting operations earlier last month due to a cyclone.
TIN: Indonesia’s PT Tomah said it was aiming for an 18 percent increase in output this year to around 36,700 tonnes, with prices of the metal expected to be between $20,000 and $22,000 per tonne.
ALUMINIUM: Aluminium traded down 0.2 percent in rings at $2,215, having earlier hit a two-week low as rising stockpiles in top producer China reinforce worries that the Chinese market remains in surplus despite capacity cuts.
OTHER METALS: Copper traded down 0.7 percent in rings at $7,067.50; tin traded up 0.2 percent at $21,730; while nickel was last bid down 0.4 percent at $13,550.
Source: Brecorder.com
