http://www.bloomberg.com/news/markets/commodities.html
Zinc Price Drops to One-Month Low in London Trading: World's Biggest Mover
Feb. 13 (Bloomberg) -- Zinc fell as much as 8.2 percent in London, the biggest fluctuation of any commodity today, after a technical chart some traders use to gauge trends signaled recent gains may be overdone.
Zinc's 14-day relative strength index was above 70 from Dec. 21 through Feb. 7. A reading above 70, derived from averaging increases or declines, indicates prices may drop. Zinc rose to a record on Feb. 6, after seven weeks of advances.
``Technically, prices are overbought,'' Adam Rowley, a London-based analyst at Macquarie Bank Ltd., said today in an interview. ``We are due for a correction.''
Zinc for delivery in three months on the LME fell $57, or 2.6 percent, to $2,143 a metric ton as of 12:58 p.m. local time. Earlier it dropped as much as 8.2 percent to $2,020, the lowest compared with intraday prices since Jan. 12. Zinc traded at a record $2,420 on Feb. 6.
Macquarie today increased its 2006 forecasts for zinc and other metals. Zinc prices this year will average $1.175 a pound, or $2,589 a ton, a 47 percent increase form the bank's previous estimate. Macquarie expects zinc demand to outpace production by 400,000 tons this year.
Zinc users may use stockpiled metal to fill the production shortfall. Inventory monitored by the LME has declined for seven consecutive months to 372,850 tons, or less than 13 days of global consumption.
Among other LME-traded metals for delivery in three months, copper rose $35.50, or 0.7 percent, to $4,873.50 a ton and nickel rose $175, or 1.2 percent, to $15,050.
Aluminum dropped $44, or 1.7 percent, to $2,486 and lead fell $12, or 1 percent, to $1,194. Tin declined $125 to $7,700.
The biggest movers are screened for the size of the market and amount of daily trading. A futures contract is an obligation to buy or sell a commodity at a set price by a specific date.
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