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Wednesday, November 7, 2018 - 1:46:34 PM
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Mining News Pro - (Updates with closing prices, recasts) By Peter Hobson LONDON, Nov 7 (Reuters) - Zinc prices on Wednesday fell to a seven-week low on expectations that a supply crunch will ease.
According to Mining News Pro -Benchmark zinc on the London Metal Exchange (LME) closed down 1.8 percent at $2,455 a tonne after touching $2,445, the lowest since Sept. 21.
"Smelter margins in China are picking up and the expectation is that production is set to trend higher into year-end," said Deutsche Bank analyst Nick Snowdon.
"There has been a big build in (zinc) concentrate stocks (in China) in the last quarter or so ... with treatment charges picking up and prices stabilising there`s a clear incentive for smelters to ramp up output," he said.
Prices of zinc, used to galvanise steel, fell 26 percent over June-August but have recovered from August`s low of $2,283. China is the biggest producer and consumer of zinc.
ZINC STOCKS: Headline inventories in the LME warehouse system continue to fall. At 134,750 tonnes they are close to a 10-year low of 131,775 tonnes reached in March. SPREAD: The premium for cash zinc over the three-month contract at $47.50 has eased from highs around $60 in late October, but signals that shortages of nearby supply remain.
DEFICIT: The roughly 13.5 million tonne global zinc market had a deficit of 292,000 tonnes in the first eight months of the year, the International Lead and Zinc Study Group (ILZSG) said. DOLLAR: Providing some support to metals prices was the dollar, which weakened after gains by the Democrats in U.S. elections cast doubt on further tax cuts. A lower dollar makes metals cheaper for buyers with other currencies. CHINA: Despite fears that a U.S.-China trade dispute will undermine China`s economy, exports from the country are expected to have expanded at a healthy clip in October as businesses frontal orders before higher U.S. tariffs set in at the turn of the year, a Reuters poll showed.
YUAN: In a sign that authorities may be stepping up interventions to keep the yuan from weakening, China`s foreign exchange reserves fell more than expected to an 18-month low in October. CHINA ALUMINA: China`s exports of aluminium raw material alumina last month were roughly equal to September`s bumper volumes, the president of Aluminium Corp of China said.
PRICES: LME copper closed down 0.1 percent at $6,153 a tonne, aluminium finished 1.7 percent higher at $1,984.50, lead rose 1 percent to $1,927.50, tin ended unchanged at $19,050 and nickel rose 0.4 percent to $11,820.
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