FOCUS: Zinc stock increases merely ‘background noise’, price outlook still positive, say analysts

Zinc remains a favourite of analysts, speculators and CTAs because its fundamental outlook remains bright despite the recent run of stock increases in LME-listed warehouses and potential mine restarts.

The LME three-month zinc price rallied this week, hitting a peak of $2,980 per tonne on Monday – just $5 below fresh multi-year highs – before retreating to $2,845, down $25 on the previous close. Availability has increased over two consecutive days – 10,425 tonnes were put back on-warrant on Thursday in LME-listed warehouses in New Orleans, which follows yesterday’s net stock increase of 14,450 tonnes in the same location Although stocks fell 1,800 tonnes to 393,925 tonnes today, on-warrant material at 299,225 tonnes is at its highest in a month - a reversal of the downward trend that had been in place since the second half of 2016. “While LME stocks have had a little boost this month, they have been on the whole steadily drawn down, with some accelerated declines in January...


Kathleen Retourné

February 16, 2017

17:07 GMT