While zinc prices continue to be hampered by a flurry of short-covering, the metal’s three-month price avoided another drop below the nearby support level of $2,700 per tonne at the afternoon close.
In addition, a narrowing of the backwardation in zinc’s cash/three-month spread has given the metal breathing space, easing from $51 per tonne on July 1 to its current level of $39 per tonne.
That said, zinc prices are down more than 17% since June 12.
“If prices can continue higher, short sellers will be under pressure. A pick-up in nearby tightness might prompt more short-covering, which could see prices move up higher,” Metal Bulletin analyst Andy Farida said.
“But zinc remains in a...