The three-month zinc price was trading back below $2,300 per tonne and down by $34 per tonne compared with Tuesday’s 5pm close.
“Zinc rallied [on Tuesday] on very little solid market support, the volumes were low and it is not a surprise it has corrected downwards,” an LME ring trader said.
Zinc stocks in LME sheds declined a further 750 tonnes on Wednesday to total 74,475 tonnes, the ninth trading day in a row of zinc being delivered out.
Low stock levels are failing to support zinc prices despite over 50% of stock being booked for delivery and just 44,650 tonnes of metal available.
“The demand outlook for LME zinc remains weak while global trade sentiment has been negatively affected by the ongoing US-China trade dispute,” Fastmarkets analyst Andy Farida said.
“Trade tensions between the US and China continue to sour following market reports that confirmed the US administration held back permission for tech companies to deal with [Chinese tech giant] Huawei again following a report that China will now halt purchases of US agricultural products,” he added.
The other base metals followed lower but did not break through any support barriers with limited news to influence price directions this morning.
The three-month nickel price dipped by $50 per tonne this morning but remained close to the $15,900-per-tonne level, supported by the news of Indonesia's proposal for a raw ore export ban from 2022.
Aluminium prices were little changed, falling just $1 per tonne but remaining at a historically low level of $1,784 per tonne.
Over 12,000 tonnes of aluminium was freshly cancelled out of LME sheds in Port Klang, Malaysia, on Wednesday but this did little to support the metal’s three-month price which has failed to trade above $1,900 per tonne since April 5.
- The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was down by 0.06% at 97.74.
- In data on Wednesday, year-to-date fixed asset investment in China recorded a year-on-year rise of 5.7%, lower than the forecast 5.9% and the previous 5.8%. The country’s industrial production growth slowed to 4.8% year on year in July, below the forecast 6.0% and the prior 6.3%.
- In European data, the German economy sank back into negative growth in April-June, with gross domestic product falling by 0.1% from the prior quarter. The United Kingdom’s consumer price index (CPI) 12-month rate came in at 2.1% in July, surpassing the 1.9% forecast.
- Later, the European Union’s flash GDP and industrial production and US import prices are of note.