Zinc at highest price since 2011

Zinc Heads for Biggest Weekly Gain Since September 2012 By Maria Kolesnikova Jul 25, 2014 6:55 P

Zinc rose to the highest price since 2011 in London, set for the biggest weekly climb in almost two years, on speculation demand will exceed supply as economies strengthen. Lead reached the highest level since December. Zinc inventories monitored by the London Metal Exchange are at the lowest since 2010 and Goldman Sachs Group Inc. forecasts a global shortage will almost triple next year to 154,000 metric tons. The LME Index of six industrial metals reached the highest level yesterday since March 2013 as a gauge of manufacturing in China touched an 18-month high and reports in Europe and the U.S. also pointed to expansion. “The sector is on the run at the moment, and that has been benefiting metals across the board on expectations that demand is finally going to catch up with increased capacity to produce,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. Zinc for delivery in three months added 0.8 percent to $2,406 a ton by 10:09 a.m. on the LME after touching $2,413, the highest since Aug. 4, 2011. The metal is up 4.9 percent this week, headed for the biggest such gain since September 2012. Prices climbed 17 percent this year, the second-best performance among the six main metals on the LME. Zinc’s 14-day relative strength index was at 81.5 today, indicating to some analysts who study technical charts that a drop may be coming. “There might be some profit-taking or selling from time to time, but it is still very strong and may go higher,” Richard Fu, director for Asian commodity trading at Newedge Group SA in London, said by e-mail. LME zinc inventories, down 30 percent this year, fell 0.2 percent to 653,900 tons today, the lowest since Dec. 10, 2010, daily figures showed. Stockpiles monitored by the Shanghai Futures Exchange slid 2.7 percent to 205,990 tons, the lowest since Dec. 31, 2009, according to separate data today. China is the biggest global consumer of industrial metals. Lead climbed as much as 1.7 percent to $2,275 a ton, the highest since Dec. 30, 2013. Copper advanced 0.2 percent to $7,185 a ton on the LME and futures for delivery in September rose 0.2 percent to $3.272 a pound on the Comex in New York. Aluminum, nickel and tin gained in London. To contact the reporter on this story: Maria Kolesnikova in London at [email protected]