AGL 38.41 Decreased By ▼ -0.07 (-0.18%)
AIRLINK 203.50 Increased By ▲ 0.48 (0.24%)
BOP 10.03 Decreased By ▼ -0.14 (-1.38%)
CNERGY 6.41 Decreased By ▼ -0.13 (-1.99%)
DCL 9.45 Decreased By ▼ -0.13 (-1.36%)
DFML 39.45 Decreased By ▼ -0.57 (-1.42%)
DGKC 98.51 Increased By ▲ 0.43 (0.44%)
FCCL 35.26 Increased By ▲ 0.30 (0.86%)
FFBL 87.75 Increased By ▲ 1.32 (1.53%)
FFL 13.73 Decreased By ▼ -0.17 (-1.22%)
HUBC 130.40 Decreased By ▼ -1.17 (-0.89%)
HUMNL 13.95 Decreased By ▼ -0.07 (-0.5%)
KEL 5.50 Decreased By ▼ -0.11 (-1.96%)
KOSM 7.50 Increased By ▲ 0.23 (3.16%)
MLCF 46.16 Increased By ▲ 0.57 (1.25%)
NBP 61.30 Decreased By ▼ -5.08 (-7.65%)
OGDC 220.70 Decreased By ▼ -0.06 (-0.03%)
PAEL 39.10 Increased By ▲ 0.62 (1.61%)
PIBTL 8.64 Decreased By ▼ -0.27 (-3.03%)
PPL 197.00 Decreased By ▼ -0.88 (-0.44%)
PRL 39.05 Increased By ▲ 0.02 (0.05%)
PTC 25.60 Increased By ▲ 0.13 (0.51%)
SEARL 105.50 Increased By ▲ 2.45 (2.38%)
TELE 8.78 Decreased By ▼ -0.24 (-2.66%)
TOMCL 36.18 Decreased By ▼ -0.23 (-0.63%)
TPLP 13.85 Increased By ▲ 0.10 (0.73%)
TREET 24.77 Decreased By ▼ -0.35 (-1.39%)
TRG 57.80 Decreased By ▼ -0.24 (-0.41%)
UNITY 33.33 Decreased By ▼ -0.34 (-1.01%)
WTL 1.68 Decreased By ▼ -0.03 (-1.75%)
BR100 11,878 Decreased By -12.4 (-0.1%)
BR30 37,146 Decreased By -210.2 (-0.56%)
KSE100 110,526 Decreased By -543.9 (-0.49%)
KSE30 34,745 Decreased By -163.7 (-0.47%)
Markets

Zinc hits over 2-month low on higher inventories, weak Chinese demand

  • Cash zinc on the LME has been trading at a discount to the three-month contract since June 2020, indicating abundant nearby supplies.
Published January 27, 2021

HANOI: Zinc prices fell on Wednesday to their lowest in more than two months as stockpiles in London Metal Exchange warehouses hit a two-year high while demand in top consumer China weakened.

LME three-month zinc shed as much as 0.9% to $2,634 a tonne, its lowest since Nov. 13, 2020, while the most-traded March zinc contract on the Shanghai Futures Exchange hit a level unseen since Nov. 4, 2020 of 19,705 yuan ($3,048.23) a tonne.

Zinc inventories in LME warehouses surged to 235,025 tonnes, their highest since September 2018, and ShFE stockpiles of the metal rose to 43,240 tonnes, the highest since Dec. 11, 2020.

"This increase in LME stock also comes amid stock building in the Chinese market, which is largely expected ahead of the Chinese New Year," ING analysts said in a note, referring to the Feb. 11-17 holiday when demand often weakens.

"Due to the COVID-19 outbreak in Hebei province, restrictions to logistics are also expected to hurt demand, with the region accounting for roughly 10% of the total galvanising capacity in China."

Hebei is China's steel producing hub and one of the hardest hit provinces in the country's most recent coronavirus outbreak.

Zinc, used mostly to galvanise steel, is now the worst performer year-to-date among the base metals complex on both the exchanges, down 4% on the LME and 4.7% on the ShFE.

FUNDAMENTALS

  • Cash zinc on the LME has been trading at a discount to the three-month contract since June 2020, indicating abundant nearby supplies.

  • LME copper fell 0.5% to $7,968.50 a tonne by 0709 GMT and aluminium dipped 0.1% to $2,018 a tonne, while nickel rose 0.2% to $18,095 a tonne.

    • ShFE nickel dropped 1.3% to 133,710 yuan a tonne and copper eased 0.2% to 58,720 yuan a tonne, while tin hit a record high of 173,890 yuan a tonne on tight supply and solid demand.

Comments

Comments are closed.