What Are the Capitals Gaming for amid Steep Ups and Downs of LME Zinc?

SHANGHAI, Jun 23 (SMM) – On the fundamentals, LME zinc inventory stood at 78,600 mt, up 50 mt from the last trading day. By continent, LME inventory in the Europe stood only at 25 mt, while that in Americas moved all the way down to 9,100 mt. Inventories in Asia were also low with a reading of 69,475 mt. Relatively low inventory has rattled the nerves of investors.

Based on the latest data, the cancelled warrants of LME zinc totalled 52,275 mt, up 16,525 mt from the last trading day. And the proportion of cancelled warrants surged from 24.93% to 66.51% in just two trading days. The quick and steep rise in the proportion of cancelled warrants have made the market highly sensitive, resulting in sharp rises and falls of LME zinc recently.

On the whole, the supply side is quite vulnerable with the slow recovery of the mine end. And the stronger support from the fundamentals explains the outperformance of LME zinc than other base metals.