news.com.au-Zinc prices have touched a two-week high as expectations of stronger demand from steelmakers rose and inventories of the metal on the London Metal Exchange hit nine-year lows.
Benchmark zinc on the LME ended 1.2 per cent higher at $US2,556 a tonne. It briefly touched $US2,568 per tonne, a high last seen on June 2.
“After years of waiting for zinc to tighten, it seems we are starting to see tangible signs that it’s happening,” Caroline Bain, senior commodities economist at Capital Economics, said.
She cited China’s rising imports of refined zinc and falling zinc output in data.
ZINC STOCKS: The market focus is on New Orleans warehouses’ on-warrant stocks, which have dropped to 144,975 tonnes after a further 24,475 tonnes of cancellations or metal earmarked for delivery. On-warrant zinc stocks – metal available to the market – have fallen 54 per cent this year to the lowest levels since July 2008.
STEEL PRICES: Chinese iron ore futures edged up along with steel but investment bank Citi said the steelmaking raw material is still under pressure amid a persistent glut.
CHINA: In April, China’s refined zinc output fell to its lowest in more than two years due to mine closures. Imports increased 21 per cent in April to 47,469 tonnes year-on-year.
COPPER: Copper prices closed up 1.2 per cent to $US5,724 per tonne, helped by news and data from China that indicated stronger demand for the commodity which is used in construction and power.
HOME PRICES: Home prices levelled off in China’s biggest cities in May but continued to climb nationwide, indicating demand remains resilient despite government measures to keep the market from overheating.
INVESTMENT: China’s securities regulator said it will encourage wealth management firms to invest in commodity futures in a bid to promote its domestic derivatives industry and raise the amount of commodities in the country’s assets under management.
FINANCING: China’s central bank plans to step up support for “green” financing, including incentives to encourage banks to extend more loans for projects friendly to the environment, a deputy governor said on Friday.
CFTC: Speculators increased their net long position in copper futures and options, latest data from the US Commodity Futures Trading Commission showed.
WARRANT HOLDINGS: Traders are watching large holdings of cash contracts and warrants of copper, aluminium and nickel.
PRICES: Aluminium closed 0.4 per cent higher at $US1,875 a tonne after touching its lowest since May 11 on Friday. Nickel gained 0.7 per cent to $US9,005 while Tin shed 0.4 per cent to $US19,575 and lead rose 0.8 per cent to $US2,128.50, its highest in five weeks.