Zinc Leads Gains in Metals on Demand Outlook as Stockpiles Drop

Zinc rose to a one-month high in London, leading industrial metal gains, as stockpiles declined. Aluminum, copper and lead also advanced, while tin and nickel fell.

Zinc supplies in warehouses monitored by the London Metal Exchange dropped 0.5 percent to 932,425 metric tons, the lowest since Sept. 19, 2012, and extending the longest slump since November 2006. Industrial metals will outperform precious metals and energy next year given the “bullish outlook for global growth,” Deutsche Bank AG said in a report today. Zinc and lead will be “relative winners,” it said.

“Zinc stocks held at exchange warehouses have been falling quite rapidly in recent weeks,” said Nic Brown, the head of commodities research at Natixis SA in London. “Its demand fundamentals are strong and improving, while the supply side looks increasingly challenging over the coming years.”

Zinc for delivery in three months rose 1.7 percent to settle at $1,950 a metric ton at 5:50 p.m. local time on the LME, after climbing to $1,957, the highest since Nov. 1.

Indonesia will proceed with an export ban of mineral ores after it received backing from parliament, Energy and Mineral Resources Minister Jero Wacik said last week. Nickel offers investors the best opportunity for gains in early 2014 on the ban, Barclays Plc said in a report yesterday.

Copper stockpiles monitored by the LME fell 0.8 percent today to 402,050 tons, the lowest since Feb. 15. Orders to remove the metal from warehouses slid 1.2 percent to 270,075 tons.

Copper for delivery in three months rose 0.3 percent to $7,159 a ton ($3.25 a pound) on the LME after jumping to $7,188, the highest since Nov. 11.

On the Comex in New York, copper futures for March delivery added 0.3 percent to $3.2665 a pound.