Zinc extends gains, hovers at four-year high on regional tightness

According to Business Recorder, zinc prices rose for a sixth consecutive session on Wednesday, reaching a peak not seen in over four years. The benchmark three-month contract on the London Metal Exchange gained 1.1% to $3,932 per metric ton, its strongest level since June 2022.

Business Recorder linked the rally to regional imbalances, with inventories falling in LME-registered warehouses while stocks piled up in China. The premium of cash LME zinc over three-month futures widened to $132 a ton, rising from nil in early July and reaching a level last seen in December. Speculative buying has also supported prices, which are up 25% so far this year.

Alastair Munro of broker Marex, a senior base metals strategist, urged caution about calling a top until long positions leave the banding reports. LME inventories slumped 31% over the two months to August 17 and have since rebounded 13%. Copper dipped 0.1% to $14,335 a ton, aluminium was flat at $3,238, and tin fell 0.7% to $55,450.