The cancellation triggered a flurry of speculation about which company was behind the move and what its plans for the material are, with some market participants claiming that a large bank had cancelled the warrants as part of a move to build up a physical trading book.
The company may have bought the warrants from a rival bank that was said to be offering a large volume of New Orleans zinc late last year, and may be moving the material to a rival warehouse at the port, trade sources said.
Over the longer term, the company that cancelled the material may be positioning itself to capture an upswing in zinc premiums over the coming months as the market moves towards a widely forecast structural deficit, a trader at a category I LME firm told Metal Bulletin.
“I don’t know who’s behind it, but I think it all looks quite bullish...
