Zinc Climbs as Stockpiles Fall to Lowest in More Than Six Yearsby
Inventories monitored by the LME decline for the 28th session
Zinc demand outlook improves after China home prices increase
Zinc gained for a second session as stockpiles on the London Metal Exchange dropped to the lowest since 2009, signaling global supplies are shrinking.
Zinc inventories dropped for a 28th straight session to 413,250 metric tons, the lowest since August 2009, as supply cuts and the closing last year of China’s MMG Ltd. Century mine and Vedanta Resources Plc’s Lisheen mine boosted the need for supplies on exchanges. Chinese new-home prices rose last month in 62 of 70 cities tracked, compared with 47 cities in February, helping boost the demand outlook for the metal.
“Continued drawdown of those LME exchange inventories suggest there’s potentially some physical demand that has to be bid up because of a supply-side issue,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, said in a telephone interview. “The demand side is also being boosted as well, looking at the updated numbers out of China with housing prices.”
Zinc for delivery in three months increased 1.2 percent to settle at $1,894 a metric ton on the LME, gaining for the sixth time in seven trading sessions.
In other base metals:
- Copper futures for July delivery rose 0.5 percent to $2.173 a pound on the Comex in New York.
- Aluminum, copper and nickel rose in London, while tin dropped. Lead was unchanged at $1,714 a ton.
- The Bloomberg World Mining Index rose 0.3 percent, with Teck Resources Ltd. and First Quantum Minerals Ltd. among the top performers.