METALS-Zinc plunges as inventories and dollar climb

By Kitco News / April 18, 2019 / www.kitco.com / Article Link


* GRAPHIC-2019 asset returns: (Adds closing prices, quote)By Zandi ShabalalaLONDON, April 18 (Reuters) - Zinc prices sank to a one-monthlow on Thursday after inventories in London Metal Exchange (LME)warehouses climbed and weak manufacturing data in Europe tookthe shine off base metals.Base metals prices had jumped in the previous session afterupbeat GDP data from top consumer China but fell on Thursday asthe dollar rose and manufacturing activity in Germany shrank. LME zinc inventories rose to their highestlevel in nearly two months, up 7,225 tonnes to 73,575 tonnes,according to exchange data.


"It's a broader weakness across base metals but zinc isdefinitely leading the way because stocks are up 11 percent,"said ING analyst Warren Patterson."We still are looking at a deficit in the zinc market but itis reducing," he said.LME zinc stocks have halved this year and touched theirlowest since at least 1998 earlier this month due to bottlenecksin processing capacity, making the metal the second bestperformer in 2019.


Benchmark zinc finished 1.9 percent lower at $2,767per tonne, after touching its lowest since mid-March at $2,751.


ZINC SPREADS: The premium of LME cash zinc over the threemonth contract was around $87 a tonne, down from ahigh of $120 touched a week ago.TREATMENT CHARGES: Korea Zinc Inc and TeckResources Ltd agreed annual concentrate treatmentcharges of about $245 a tonne, 67 percent higher than last year,as mine supply ramps up. The agreement, along with higher spot treatment charges, is
good news for smelters that have been struggling with lowcharges for years due to low mine supply."These are all signs that the concentrate supply picture isimproving and that should feed through to the refined marketeventually," ING's Patterson said.


DOLLAR: The dollar rose against a basket of currencies,making most metals it is priced in more expensive, includingbase metals. ALUMINIUM CHINA: Shanghai aluminium prices breached the14,000 yuan ($2,094) a tonne barrier for the first time infour-and-a-half months, a level considered an average break-evenfor struggling Chinese aluminium smelters.SUPPLY: China Hongqiao Group , the world's biggestaluminium producer, will this year restart some of the smeltingfacilities it was forced to shut in 2017, two sources withknowledge of the matter said. LME nickel fell to its lowest since late February at$12,625 a tonne, later moderating in electronic trading to tradedown 1.7 percent at $12,655 a tonne by 1600 GMT.PRICES: Copper shed 1.2 percent to $6,476 a tonneafter touching its highest since July in the previous session.Aluminium touched a three-month low of $1,844.50 a tonnebut ended 0.9 percent higher at $1,867.


Lead was down 0.3 percent at $1,941 a tonne, whiletin fell 0.8 percent to $20,240.HOLIDAY: The LME will be closed on Friday and Monday forEaster.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top Base and Precious Metals Analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Tom Daly; editing by John Stonestreet,Emelia Sithole-Matarise and Kirsten Donovan)

zandi.shabalala.thomsonreuters.com@reuters.net))

LME price overview COMEX copper futures Base metals news All metals news All commodities news Metals diary Foreign exchange rates SPEED GUIDES)) Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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