Zinc, copper surge to 2015 highs

It's good to be a base metals producer!

Remember, the projected quarterly figures were based on prices from over two weeks ago, yet we've now had a surge and each dollar goes straight to our bottom line.

There is no doubt CSD will be beating estimates (for the second time in a row).

;-)

Zinc, copper surge to 2015 highs

• AAP
• MAY 06, 2015 8:15AM

Zinc hit its highest price in eight months on Tuesday and copper its loftiest since mid-December thanks to a combination of concern about supply shortfalls and optimism over the global economy.

All the metals on the London Metal Exchange (LME) attracted buying, which also pushed nickel to a six-week high, as the market reopened following a British public holiday on Monday.

"Commodities are bouncing back up, led by oil and iron ore. Base metals seem to be following the herd," Richard Fu, director of Asian commodities trading for Societe Generale Newedge in London, said.

Three-month LME zinc jumped 2.6 per cent to an intraday peak of $US2,404.50 a tonne, the strongest since September last year. It failed to trade in closing open outcry activity and was last bid at $US2,400.

"The fundamentals in zinc are good," Nic Brown, head of commodity research at Natixis in London, said.

"By the time we get to the end of year, and the effect of the closures of Lisheen and Century are starting to feed through, the fundamentals will look even stronger."

Investors are betting that the shutdown of big mines such as Lisheen in Ireland and Century in Australia will lead to a zinc deficit.

LME copper climbed 1.3 per cent to close at $US6,480 a tonne, the highest since mid-December last year.

The gains came after Glencore became the latest firm to report weaker production, posting a nine per cent drop in first-quarter copper output.

"The mine output picture is pretty poor in the first quarter. Copper miners are facing a lot of problems around the world," Mr Brown said.

The market was boosted by new forecasts from the European Commission showing euro zone economic growth will be stronger than previously expected this year.

Investors were also cheered by data showing that the pace of growth in the US services sector hit a five-month high in April.