According to Mining News Pro - Lead also hit a three-month peak after inventories dwindled, while the wider industrial metals market was boosted by a sliding dollar. "The big question in zinc is smelter utilisation in China. It`s really finely balanced, it`s on a knife-edge," said Oliver Nugent, an analyst at Citigroup in London. "If you make a tiny change in your assumption for
utilization this year, you swing from a balanced market to a big deficit."
Price dynamics in London and Shanghai futures markets had opened up an arbitrage window, so investors were buying on the London Metal Exchange to send to China, Nugent added. That showed up in inventory data on Friday, with weekly Chinese zinc stocks rising and LME levels falling. Benchmark LME zinc reached its strongest since Oct. 24 at $2,679.50 a tonne before settling in closing open outcry trading at $2,673, up 1.3 percent.
On-warrant LME zinc inventories, those not earmarked for delivery, have tumbled by half this month to the lowest levels since October 2007. Stocks on the Shanghai Futures Exchange climbed 17.2 percent to 34,510 tonnes over the past week.
Three-month LME lead climbed 1.7 percent to end at $2,109 a tonne, its highest since Oct. 15.
LME lead inventories have shed a fifth over the past two weeks, sliding to 82,975 tonnes, their lowest since June 2009.
Giving a boost to metals, the dollar index tumbled from its three-week highs in the previous session, as traders` focus shifted to the Federal Reserve`s policy meeting next week when the U.S. central bank is expected to leave interest rates unchanged. A weaker dollar makes commodities priced in the greenback cheaper for buyers using other currencies.
Three-month LME copper jumped 2.3 percent to finish at a one-week high of $6,056 a tonne. Some dealers pointed to short-covering ahead of the Lunar New Year holidays in China next month.