LONDON: Zinc prices hit their lowest in almost nine months on Friday, the only base metal to trade in negative territory as investors expect a narrowing of the global market deficit.
Three month London Metal Exchange zinc was last bid down 1.1 percent at $2,975 a tonne in official midday rings, having hit its lowest since last August at $2,972. Prices have fallen about 15 percent since peaking above $3,500 mid-February.
“We see prices drifting. Zinc is still tight but the deficit is shrinking,” said Xiao Fu, head of commodity market strategy at Bank of China International. But she added: “It’s a healthy correction, the market will remain right, meaning prices will remain underpinned.”
Some 880,000 tonnes of additional zinc mine capacity is due to come on stream this year, meaning the market will be much less tight, according to the International Lead and Zinc Study Group.
However, the group still expects a deficit this year of 263,000 tonnes.
ZINC TECHNICALS: Zinc this week violated the 28-month rising trend line below the $3,090 area, leading to a sell signal in the weekly momentum chart which suggests further selling pressure in the next few weeks, ING said in a note.
ZINC TREATMENT CHARGES: The zinc industry agreed a 15 percent drop in annual zinc processing fees to $147 a tonne.
ING said the slight drop in annual terms will offer some relief to smelters, and “reflects expectations that mine supply will soon loosen significantly”.
ALUMINIUM: Aluminium traded up 1.6 percent in rings at $2,306 a tonne. The metal is on course for a 4 percent weekly rise after falling almost 10 percent last week.
SCRAP: The company in charge of inspecting scrap metal shipments from the United States bound for China said it would suspend checks on shipments for one month starting on Friday.
CHINA, US TRADE ROW: China and the United States reached a consensus on some aspects of the countries’ trade row, but disagreements over other issues remain “relatively big”.
GLOBAL MARKETS: World stocks were set for their biggest weekly loss since the middle of March, while the dollar hovered near highs hit on its recent rally as investors awaited jobs data from the United States.
CHINA DATA: A flurry of Chinese data in coming weeks is expected to show the world’s second-largest economy remained strong in April, underpinned by strong industrial output and exports despite rising trade tensions with the United States.
OTHER METALS: Copper traded down 0.1 percent in rings at $6,819 a tonne, lead was last bid up 0.5 percent at $2,272, tin was last bid up 0.1 percent at $21,225 while nickel was last bid up 0.7 percent at $13,875.
Source: Brecorder
