Zinc’s three-month price continued to trade in a downtrend over the afternoon, closing 1.2% lower day on day and falling further from its support level of $2,500 per tonne. The metal last closed above that mark on December 20 last year.
A continued easing of the tightness in the metal’s forward curve continued into the afternoon, with its cash/three-month spread easing from a backwardation of $21.50 per tonne during morning trading, to $14.50 per tonne at the close.
Additionally, there remains one dominant warrant-holding position that holds 50-79% of LME stocks, including tomorrow/next and cash.
“It seems like there’s some lending going on. Generally, when you have a spread move like this, and it is to do with stocks, you get inflows the next day. When that happens, there’s usually a wider market reaction,” Macquarie Group base metals strategist Vivienne...