Zinc’s outright price on the LME was recently seen at $2,442 per tonne, continuing its downward trend after slipping below the $2,500-per-tonne support level at Tuesday’s close and settling at $2,472 per tonne.
Turnover was high in the galvanizing metal over the morning, with more than 2,000 lots exchanged as of 9am London time.
Yet zinc’s forward spreads continue to deter market participants from taking positions, with the metal’s benchmark cash/three-month spread remaining in backwardation since mid-September. The spread was recently seen in a $45.50-per-tonne backwardation.
“The technical consolidation in the LME zinc complex will persist in the very short term and based on its technical configuration, the indicators that we follow suggest that there is still room to the downside before the metal can find decent technical support, namely the rising 50 day moving average,” Fastmarkets analyst Andy Farida said in his Zinc Today report.
Meanwhile, tin’s outright price was similarly weaker over the morning, recently trading at $16,160 per tonne and down by around 1% from Tuesday’s 5pm closing price of $16,340 per tonne.
Prompting the downward move in tin, a fresh inflow of some 120 tonnes into LME-registered warehouses in Busan, South Korea, caused price action to sink to an intra-morning low of $16,020 per tonne, while just 145 lots were exchanged as at 9.10am London time.
But forward spreads in tin continue to support buying activity, with the metal’s cash/three-month spread recently trading in an $11-per-tonne contango.
- The dollar index was higher over the morning, climbing by 0.02% to 98.34.
- In other commodities, Brent crude oil futures were down by 0.84% over the morning, falling to $61.45 per barrel.
- In European data released on Monday, the United Kingdom’s average earnings index on a three-month moving average compared to the same period a year earlier fell to 3.6% for the October-November period, down from 3.8% at the prior reading.
- Meanwhile, the UK’s unemployment rate for the October-November period was better at 3.8%, while the German ZEW economic sentiment index for the October-November period similarly was better at -2.1.
- In economic data due today, the UK’s consumer price index (CPI) on a year on year basis is due, along with similar figures from the United States on a month on month basis.
- Later, US Federal Reserve chair Jerome Powell is also due to speak.