Zinc News LME hall of mirrors
Those units will come from the rest of the world. Unfortunately, we don't know how much because China hasn't released detailed metals trade reports since March.
And we don't know how much there is to feed Chinese imports because most of the inventory in the rest of the world is sitting away from the statistical light in off-market storage.
What we do know is that a significant part of that inventory is located in Antwerp and New Orleans, because those are the two LME locations that have seen large amounts of zinc placed on to LME warrant this year.
Antwerp received 60,050 tonnes over a three-day period in April and another 19,100 tonnes on July 20.
New Orleans has seen sporadic inflows totalling 182,975 tonnes this year.
The appearance of so much zinc has played to the bear narrative. But in truth it is no more than a hall-of-mirrors interplay of LME spreads, LME warehouse economics and a good deal of warrant sifting as traders seek out saleable units from what might well be very old metal.
Which is why what has "arrived" at both Antwerp and New Orleans hasn't stuck around for long.
The Belgian location is currently being cleared out after a mass cancellation last week. There are 31,275 tonnes of zinc awaiting physical load-out and just 200 tonnes of available stock.
In New Orleans, despite the merry-go-round of zinc between on- and off-market storage, headline LME stocks are now down by 50,800 tonnes on the start of the year.
Outside of these two locations, inflow into the LME storage system has been a minimal 6,275 tonnes since January. Most of it has already departed.
Only two other locations now hold registered open tonnage – Rotterdam with 100 tonnes and Bilbao in Spain with 300 tonnes.
Appearances can be deceptive when it comes to LME stocks but the underlying reality is that outside of rotational movement at Antwerp and particularly New Orleans, there doesn't seem to be much metal available even at recent high cash premium levels.
The ILZSG's October forecasts tell us why that shouldn't be a big surprise.
Time-spreads in both London and Shanghai are a reality check on a bear narrative that had run ahead of itself.
Here is the link to the full article.
tiger
https://www.mining.com/web/zinc-market-tightness-confounds-bearish-expectations/