Zinc is coming : Run, run, run...ASX Code: IBG :) By Eric Onstad...

Zinc is coming : Run, run, run...ASX Code: IBG  

By Eric Onstad

LONDON, July 12 (Reuters) - Zinc touched a 13-month peak and nickel hit the highest since last October on Tuesday as speculators piled in after the selection of a new prime minister for Britain and on hopes of more stimulus.

Increased risk appetite among investors sparked a broad-based rally on the London Metal Exchange, but some analysts remained wary because little had changed in the supply-demand picture.
"I'm a bit nervous about these rallies, they do seem to be driven by investor buying rather than any change in the fundamentals," said Caroline Bain, senior commodities economist at Capital Economics in London.
"At the beginning of the year we were really positive, but prices have already risen beyond our end-of-year forecasts."

Benchmark LME zinc closed 2.5 percent higher at $2,193 a tonne, the strongest since June 1 last year.
Zinc has been investors' favourite, surging 36 percent so far in 2016 as closures and suspensions of major mines tightened the supply picture.

"Unlike most other metals, zinc merited higher prices, Bain said. "From the fundamental perspective, we can justify a rally in the zinc price, we are seeing clear signs that supply is tightening there."




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