Copying and distributing are prohibited without permission of the publisher

(AMM) Zinc rallies as funds cover shorts

May 19, 2011 - 02:15 GMT Location: New York

KEYWORDS: zinc , london metal exchange , new orleans

Zinc prices are expected to continue to rebound in the near term after approaching $2,100 per tonne in recent days as hedge funds cover short positions, offsetting the arrival of more than 17,000 tonnes of metal in London Metal Exchange-bonded warehouses in New Orleans.

A drop any lower and the galvanizing metal would have returned to summer 2010 levels and close to the cost of production, market participants said.

That stall ultimately prevented prices slipping to $2,000 per tonne, market participants said. Galvanizers have told AMM they would buy in quantity if prices fell back to $1,800 to $2,000 per tonne.

Such a decline is unlikely for now, traders predict, although prices are equally unlikely to return to the heady heights of $3,800 per tonne reached in early summer 2007.

For now, the funds are happy to...

All material subject to strictly enforced copyright laws. © Euromoney Institutional Investor PLC.

Please log in using your online subscriber details.
Your username will be your registered email address with Metal Bulletin.

If you aren't a subscriber yet, feel free to take a seven day free trial, or subscribe using the instructions below.

A standard subscription include one year's worth of news and prices. You can also upgrade to the full archive and benefit from more than 13 years of intelligence. Start your subscription today.

Free trial

Taking a free trial will give you open access to Metal Bulletin online news, prices, archived content and email alert service for the next seven days. Start your free trial today.

Free trial

Already have an account?

Lead & Zinc

May 23, 2012 19:51 Trevali buys mill to ease Halfmile start-up
May 23, 2012 18:17 ZincOx delivers first concentrates to Korea Zinc
May 23, 2012 17:06 CLOSE TO CLOSE: Base metals prices suffer further under euro uncertainty in LME kerb
May 23, 2012 14:31 Euro strife drives base metals prices lower in LME officials
May 23, 2012 11:18 Shanghai copper prices down as Greece fear dominates sentiment

Comment & analysis

EXPERT VIEW FROM ERNST & YOUNG: Horror week favours the brave

Seven days is a long time in the investment world, but last week must have felt longer than most.
COMMENT: When super-cycle poster child BHP Billiton trims its plans...

BHP Billiton is one of the poster children for the commodities super-cycle: a mining company whose immense upstream assets in copper and iron ore have fed the industrialisation of China since the early years of the 21st century and enabled it to return $52 billion to shareholders between 2001 and 2011.
LORD COPPER: There is nothing to fear after JP Morgan loss ...

So, here we go again. Another bank, another huge trade gone bad. This one doesn’t even appear to have been a case of rogue trading; a whole desk seems to have been operating with the full knowledge of the management and/or risk committee.