LIVE FUTURES REPORT 21/11: Fresh inflow pressures LME zinc price below $2,300/t; tin climbs 1.2%

The three-month zinc price on the London Metal Exchange was lower during morning trading on Thursday November 21, dipping below nearby support against fresh inflows of material, while tin’s outright price bucked the downward trend.

Zinc’s three-month price was recently seen at $2,297 per tonne, with price action down 0.5% from Wednesday’s closing price of $2,313 per tonne. Turnover in zinc was high over the morning ,with just over 3,200 lots exchanged as of 9:45am London time.
Yet against continued tightness across zinc’s forward curve, some market participants have opted to deliver material onto the exchange to avoid costly financing conditions.
Zinc’s benchmark cash/three-month spread has remained in a backwardation since mid-September, and was recently seen at $25.50 per tonne.
LME on-warrant zinc stocks have climbed by just under 70% this month, prompting softness in the metal’s outright price, with deliverable inventories now at 46,900 tonnes compared with 27,800 tonnes at the start of the month.
“While we suspect that the LME zinc complex is already oversold in the short term, its most recent technical development suggests that there is more downside in store, potentially a fresh annual low if sellers can maintain the current momentum,” Fastmarkets analyst Andy Farida said in his Zinc Today report.
Elsewhere in the complex, the three-month tin price was the standout performer over the morning, climbing by 1.2% to recently trade at $16,185 per tonne while turnover was high at some 175 lots exchanged as of 10am London time.
Despite LME tin’s elevated exchange inventories, which now sit at 5,790 tonnes on-warrant, physical participants continue to indicate that the underlying tin price should trend higher against both China and Indonesia’s planned production cuts announced in September.
Meanwhile, bolstering buying momentum in tin, the metal’s forward curve continues to support spot business, with its cash/three-month spread recently trading in a $33.14 per tonne contango.
Other highlights
  • Elsewhere in the complex, the three-month copper price on the LME continues to edge lower, recently trading at $5,820 per tonne while its cash/three-month spread narrowed slightly to a $20.50 per tonne contango.
  • In other commodities, Brent crude oil futures were down by 0.29% at $65.50 per barrel.
  • This afternoon, the European Central Bank (ECB) is expected to release its monetary policy meeting accounts.
  • Later, the United States is expected to release figures on its Philly Fed manufacturing index, with an expected level currently set at 7.

Hassan Butt

hassan.butt@fastmarkets.com

Published

Hassan Butt

November 21, 2019

10:55 GMT

London