Zinc, Lead, Tin Reach Highest Since 2015 on China Factory Data

  • ‘Chinese manufacturing data display some improvement’: BGC
  • Copper little changed as traders assess Chile strike prospects

Zinc, lead and tin climbed to the highest in more than a year after China’s official factory gauge unexpectedly rose last month, signaling improved demand from the world’s top metal user.

The manufacturing purchasing managers index rose to 50.4 in August, near a two-year high, the statistics bureau said Thursday, up from July’s 49.9 and compared with the 49.8 median estimate of economists surveyed by Bloomberg. The pickup strengthens the case that China’s economic stabilization remains intact even as credit growth slows and the central bank refrains from cutting interest rates. Copper was little changed in New York as traders assessed the prospect of strikes at two mines in Chile, the biggest copper-producing nation.

“Metals largely post gains as elements of Chinese manufacturing data display some improvement,” Michael Turek, the head of base metals at BGC Partners Inc. in New York, said in an e-mail. “Continuing Chilean labor unrest could become more pertinent for copper.”

Zinc for delivery in three months rose 1.2 percent to settle at $2,338 a metric ton at 5:54 p.m. on the London Metal Exchange, earlier touching $2,347, the highest since May 2015. The metal for immediate delivery settled Wednesday at a $8.75 a ton premium to the benchmark contract, the widest backwardation since May 2015.

Lead and tin gained more than 1 percent and touched highs not seen in the past year. On-warrant tin stockpiles dropped 5.2 percent to 2,750 tons, the lowest in 11 years, according to LME data.

In other metals:

  • On the LME, nickel and copper also gained, while aluminum was little changed.
  • Copper futures for December delivery slid 0.1 percent to $2.0755 a pound on the Comex in New York.
  • The market remains vulnerable to risks around excess supply, according to Wei Lai, an analyst with Cofco Futures Ltd. Copper inventories in warehouses tracked by the LME rose for an eighth day, the longest run since March 2015, as stockpiles in South Korea swelled to a five-year high.
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