Not Good News LONDON, March 5 (Reuters) - Zinc slid to a two-month low on Monday, falling for a fifth straight session as inventories surged and as concerns about proposed U.S. trade tariffs weighed on metals used in steel manufacturing.
Zinc, which is most commonly used to galvanise steel, has fallen nearly 8 percent since hitting its highest in more than a decade last month, at $3,595.50 a tonne.
It came under pressure last week along with aluminium and fellow steel component nickel after U.S. President Donald Trump announced plans to impose hefty tariffs on imported steel and aluminium to protect U.S. producers.
"It has always been our view that zinc prices would fall back quite sharply this year, regardless of what happened with steel, which is obviously a concern," Capital Economics analyst Caroline Bain said.
"It has had the most phenomenal rally and there was always scope for it to eke back. On the fundamental level we think mine supply grew strongly last year and we see more of that this year, so we see the market tightness easing."
* ZINC PRICES: London Metal Exchange zinc was down 1 percent at $3,323 a tonne at 1035 GMT, having slid 4.2 percent last week, its biggest weekly loss since late November.
* ZINC INVENTORIES: Zinc stocks held in London Metal Exchange warehouses <MZN-STOCKS> surged 59 percent on Monday to 209,050 tonnes, while on-warrant levels nearly doubled to 162,825 tonnes.