Zinc Rebounds From Longest Slump in 25 Years on Supply OutloZinc Rebounds From Longest Slump in 25 Years on Supply Outlook
https://www.bloomberg.com/news/2014-02-05/zinc-rebounds-from-longest-slump-in-25-years-on-supply-outlook.html
By Agnieszka Troszkiewicz Feb 5, 2014
Zinc rose in London, rebounding from the longest losing streak in 25 years, on speculation strengthening demand in China will curb supply of the metal.
Mitsui Mining & Smelting Co., Japan’s top zinc producer, raised annual charges to overseas buyers by as much as 70 percent amid rising Chinese consumption, up from a 15 percent gain last year. A global deficit will widen this year to 120,000 metric tons, Morgan Stanley said in a Jan. 22 report, forecasting a 10 percent gain in the average cash price.
“Zinc supply is tightening,” Richard Fu, director for Asian commodity trading at Newedge Group SA in London, said in a note.
Zinc for delivery in three months climbed 0.9 percent to $1,970 a ton by 12:51 p.m. on the London Metal Exchange. Prices slumped 6.6 percent over 10 sessions through yesterday, the longest run of drops since at least January 1989, according to data compiled by Bloomberg. Markets in China are closed through tomorrow for the Lunar New Year holiday.
Stockpiles of zinc monitored by the LME, at the lowest since last February, dropped 0.7 percent to 839,175 tons, daily data showed. Consumers have earmarked 31 percent of inventories for removal from warehouses, according to the figures.
Copper for delivery in three months added 0.3 percent to $7,060 a ton in London and the contract for delivery in March gained 0.4 percent to $3.2045 a pound on the Comex in New York. Inventories tracked by the LME, at a 13-month low, slipped for a 14th day to 311,225 tons and orders to remove copper from warehouses fell 0.9 percent to 185,500 tons.
An ADP Research Institute report due at 8:15 a.m. New York time will show U.S. companies added 185,000 workers in January and government data on Feb. 7 will show nonfarm payrolls gained by 184,000, according to Bloomberg surveys of economists.
“If the data on Friday does come on a better level than the forecast, we could expect more strength for the dollar, which may be bearish for copper,” Naeem Aslam, chief market analyst at Ava Capital Markets Ltd. in Dublin, said by e-mail.
Aluminum, nickel and lead advanced in London. Tin fell.