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MB ZINC CONF: Consumers turn to short-term hedges in opaque zinc market

May 12, 2011 - 17:51 GMT Location: Dublin

KEYWORDS: MB , Zinc , Conference , hedging , consumers , LME , prices , Macquarie , Credit Agricole

Zinc consumers are turning to short-term hedges in a market lacking forward price visibility, market participants said at the MB Zinc Conference in Dublin.

Physical zinc traders are encouraging customers to hedge up to three or six months forward, but advise against taking positions further out in a market that may be heavily directed by macroeconomic events, MB understands. "No one has a crystal ball for this market. We are advising against hedging longer term because prices could go either way," one European physical trader said. "We are advising consumers to follow the market up and follow it down step by step because price movements will be less erratic in percentage terms," he said. The collapse seen across major commodities last week has created increased interest in short term hedging because...

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