Zinc hits two-week high as tight stocks spur bullish sentiment

Zinc reached a two-week peak on Monday, with the London Metal Exchange’s three-month contract up 1.5% at $3,800.50 a metric ton by 1030 GMT. The price had earlier touched $3,821.50, its strongest level since October 12, as shrinking stocks and higher electricity costs lifted market sentiment. Business Recorder reported that the refined zinc market moved from a 27,500-ton surplus in July to a 3,900-ton shortfall in August, according to the International Lead and Zinc Study Group.

Shanghai Futures Exchange zinc inventories declined 5% week on week to 137,139 tons, their lowest since March, while LME on-warrant stocks stood at 133,700 tons. The LME cash contract traded at an approximate $80-a-ton premium to the three-month contract, indicating near-term tightness; one holder controlled 30% to 40% of LME zinc warrants and cash contracts. Elsewhere, copper rose 0.1%, aluminium slipped 0.1%, lead gained 0.6%, nickel fell 0.5% and tin advanced 1.1%.