Zinc jumped to its highest in two weeks on Monday as falling inventories and rising power prices boosted sentiment on the metal used to galvanise steel.
Benchmark three-month zinc on the London Metal Exchange was up 1.5% to $3,800.50 a metric ton as of 1030 GMT, having earlier hit $3,821.50, the most since October 12.
“Zinc sentiment appeared neutral to modestly bullish,” Citi said in a post-LME Week note on Monday. “While mine supply is likely to grow in 2027, some participants think the market remains too optimistic on the scale of growth given under performance of recent years.”
The global refined zinc market swung to a deficit of 3,900 tons in August from a surplus of 27,500 tons in July, data from the International Lead and Zinc Study Group showed.
Zinc prices were being supported by high power prices, declining production in Peru and a drawdown in inventories, one trader said.
London copper eases on rising LME stocks, demand worries
Shanghai Futures Exchange zinc stocks fell 5% from the previous week to 137,139 tons, the lowest since March, data from the bourse showed on Friday. Available, or on-warrant LME zinc inventories were at 133,700 tons.
The cash LME zinc contract was at a roughly $80 a ton premium over the three-month forward, pointing to near-term tightness. One entity holds between 30% and 40% of LME zinc warrants and cash contracts, exchange data showed.
Elsewhere, copper edged up 0.1% to $14,328.50 per ton, with little impact from a strike at Teck Resources’ Highland Valley copper mine.
“Highland Valley’s one of their key assets. But as a mine goes, it’s not that big,” Panmure Liberum analyst Tom Price said, estimating production at 100,000 tons a year.
The Yangshan copper premium, a gauge of China’s appetite for imported copper, hit $168 a ton on Friday, its highest since 2014, after ShFE copper stocks fell more than 25% to 54,356 tons.
Elsewhere, aluminium dipped 0.1% to $3,039.50, lead added 0.6% to $1,918.50, nickel fell 0.5% to $15,765 and tin gained 1.1% to $50,920.