Despite mixed market sentiment, however, the increasing tightness in zinc availability could boil down to supply flows.
Zinc’s cash/three-month spread ballooned to $63 per tonne on October 23 this year from $15 per tonne on October 9, moving to its widest level since October 2017, while recently trading in a backwardation of $66 per tonne.
Prior to this, zinc had not exhibited such a wide backwardation since August 2007.
Meanwhile, the LME currently holds 144,175 tonnes of zinc, which is the lowest total volume since June 2008 and down by just under 85% from stock levels seen in 2012, when the total LME zinc inventory reached a peak of 1,008,850 tonnes.
Total LME on-warrant material is currently...