Zinc and other metals prices rose on Tuesday, boosted by strong credit data in top metals consumer China and a weaker dollar, while tin gained on falling output in key producer Myanmar. Data showed that Chinese banks extended 1.22 trillion yuan ($181 billion) in new loans in September, indicating that the central bank is keeping policy accommodative to support economic growth.
"China released new credit data, which was better than expected. The new yuan loans hit the highest level since June, so that's helped to lift sentiment," said Xiao Fu, head of commodity market strategy at Bank of China International in London. Benchmark zinc prices on the London Metal Exchange closed up 0.5 percent at $2,285 a tonne, off an earlier session high of $2,313. Zinc has been the best LME performer this year, climbing by 42 percent on concerns about shortages developing after mine closures and suspensions.
"Zinc appears to have seen stops triggered through yesterday's high," Dee Perera at broker Marex Spectron said, adding that Commodity Trading Advisors (CTAs) were leading the buying interest. Also supporting the LME complex was the dollar's retreat from a seven-month high, making prices quoted in dollars more competitive for buyers with other currencies.
Tin was one of the top LME performers on Tuesday, ending 1 percent higher at $19,625, after senior mine officials in Myanmar, China's top supplier of ore, told Reuters that production at key operations was falling sharply and deposits could be depleted in two to three years. LME copper finished 0.1 percent firmer at $4,681 after ending flat in the previous session, not far from Friday's one-month trough of $4,623.25.
LME nickel closed 1.2 percent stronger at $10,410 after data showed the global nickel market was in deficit for the first eight months amid strong Chinese demand and a crackdown on Philippine mine supply. LME aluminium was the worst performer, dropping 1.1 percent to end at $1,642, while lead slipped 0.8 percent to $1,973. Both metals touched the lowest levels since September 28.
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