Zinc hits 10-month low; copper hits weakest level since late May

Zinc prices hit the lowest in over 10 months on Monday as a rise in inventories signalled supplies were healthy and speculators put pressure on the market.
Daily data showed zinc on-warrant inventories - those not earmarked for delivery - in warehouses certified by the London Metal Exchange rose 2,300 tonnes to 241,525 tonnes. They have shot up 83 percent since the beginning of March.
The steady rise in stocks has mirrored a breakdown in prices, which have shed a fifth since touching the strongest in over a decade of $3,595.50 a tonne on Feb. 15.
"The charts on zinc don't look good, the break below $2,970 was worrying," said Gianclaudio Torlizzi, Partner at consultancy T-Commodity in Milan.
Benchmark LME zinc closed down 2 percent at $2,858 a tonne after touching $2,835, the lowest since Aug. 7 last year.
"The metal sees growing speculative shorts on both the LME and ShFE (Shanghai Futures Exchange)," Alastair Munro at broker Marex Spectron said in a note.
Metals rallied during Asian trading after the central bank in top metals consumer China said on Sunday it would cut the amount of cash that some banks must hold as reserves by 50 basis points to spur lending to smaller firms.
Chinese demand for industrial metals was holding up well and the Chinese central bank move demonstrated that the government was concerned about growth, Torlizzi said.
"We think the current weakness in metals is a very nice opportunity to go long, especially in copper. We are not buying
there is a big slowdown in the global economy," he said.
Three month LME copper ended 0.5 percent lower at $6,755 a tonne after hitting the lowest since early May at $6,720 a tonne.
Supporting copper was news on Friday that workers' unions at Codelco's small Salvador copper division in Chile had rejected an early wage deal from the company.
LME aluminium finished down 0.9 percent at $2,155 a tonne after reaching $2,150, the weakest since April 10.
Citi analyst Maximilian Layton says the bank has upgraded its second half forecasts due to the ongoing physical nickel deficit and stronger investor positioning in Shanghai.
"Overall we have shifted from the long-term 'buy-on-dip' nickel camp to the short-medium term 'buy on $14-14.5k dip' camp," he said in a note.
LME nickel closed down 3.5 percent at $14,730.
Lead ended up 0.2 percent to $2,420 and tin finished 1.4 percent lower at $20,125.