LME Zinc Inventory Dropped to 19-Month Low

On the one hand, Teck Resources has signed an annual zinc concentrate contract with a 45% increase in TCs to $230/dmt. An escalation clause was included: if the prices of zinc exceed $3,800/mt, TCs will rise by $0.05/mt for every $1/mt increase in the prices of LME zinc, but if the zinc prices fall, TCs will remain unchanged (the same as the 20%/80% price sharing scheme in China).

Total zinc ingots inventories across seven major markets in China stood at 278,000 mt as of April 8, up 5,200 mt from April 1, down 300 mt from March 6. Domestic inventories increased.

Total zinc inventories across seven Chinese markets stood at 133,800 mt as of October 8, up 14,000 mt from September 30 and 2,500 mt from September 27.

On the macro front, the US ISM manufacturing PMI for September continued to improve, rising to 61.1% from 59.9% in August. The September manufacturing PMI stood at 58.6, the first time that it fell below 60 since March this year. China’s manufacturing PMI for September fell to 49.6, slightly below the 50 mark. The PMI readings of Europe and China both fell. In the US, the ADP employment data increased by 568,000 in September with an estimate of 430,000. The previous reading was revised from 374,000 to 340,000. The PPI in the Eurozone in August stood at 1.1% on a monthly basis, the lowest since April.

Shanghai base metal fell across the board on Thursday morning amid the sluggish transaction on the last trading day before the National Day long holiday. Meanwhile, their counterparts on LME trended mixed.

Total zinc inventories across seven Chinese markets stood at 129,200 mt as of September 24, up 6,200 mt from September 13 and 12,000 mt from September 17.

Shanghai base metals mostly trended higher on Friday morning amid slumping US dollar and eased market concerns about the default of Evergrande. Meanwhile, their counterparts on LME performed similarly.

 This is a roundup of China's metals weekly inventory as of September 17.

Social inventories of silicon metal across Huangpu port, Kunming city and Tianjin port increased 2,000 mt from the previous week to 52,000 mt as of Friday September 10.

Domestic zinc output stood at 508900 mt in August 2021, down 1.22% or 6300 mt on the month and 0.04% on the year, according to SMM. Cumulative output in January-August totalled 4.042 million mt, a year-on-year increase of 4.47%. Alloy output at domestic zinc smelters in SMM’s survey sample was 75,500 mt in August, up 80 mt on the month.