Metals News
Zinc fell to a two-week low as supply increased in China
Jul 5,2019
Source:Wenhua Finance and Economics
The content below was translated by Tencent automatically for reference.

SMM News: according to foreign news on July 4, the London Metal Exchange (LME) zinc fell to its lowest level in two weeks on Thursday, as China's rising production and LME spot zinc premium fell sharply, indicating that the market supply situation has improved.

At 17:00 on July 4, London time (00:00 on July 5, Beijing time), the target for three-month zinc closed down 1 per cent at $2425 a tonne, close at $2412, a five-and-a-half-month low hit last month.

Zinc futures prices are down more than 30 per cent from their highs at the start of last year as trade frictions between China and the US weaken the demand outlook as traders prepare for a surge in refined zinc production and the end of supply shortages.

"rising production in China, rumors that zinc is entering LME warehouses from bonded warehouses in China and a sharp drop in the LME spot zinc premium are driving prices lower," said Nick Snowdon, an analyst at Deutsche Bank. "

"the price of zinc is likely to fall further to a low of $2000," he said.

"prices are unlikely to fall any lower because of low inventory levels," he added. "

The increase in zinc production at Chinese smelters is expected to end a supply shortage of 97000 tons in the first four months of the year, according to data released earlier by the international lead and zinc research group (ILZSG).

China produced 480000 tonnes of refined zinc in May, up 7.4 per cent from a year earlier. Global zinc production is about 13.5 million tons.

Spot zinc fell to $9.50 over LME's three-month zinc contract, down from more than $150in May and the lowest since March, suggesting a recent increase in supply.

U. S. financial markets were closed for the Independence Day holiday on Thursday, so trading was relatively low.

In other metals, LME copper for three months closed flat at $5920 a tonne.

Three-month aluminium rose 1 per cent to close at $1807 a tonne.

Three-month tin rose 0.2% to close at $18350 a tonne.

Three-month nickel closed untraded, but ended down 0.1 per cent at $12340 a tonne.

Three-month lead, also untraded, ended down 0.1 per cent at $1878 a tonne.

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