Zinc prices slipped on Friday, notching up their worst quarter since 2015 with investors sceptical of reports that Chinese smelters plan to cut output by 10 percent in response to low prices and treatment charges. China's largest zinc smelter said it would not participate in the output cuts that were reported on Thursday, while doubts emerged over whether other smelters would fully comply.
"If you're going to cut smelter production you're going to slow down concentrates purchases, but we haven't seen that," said ING commodities strategist Oliver Nugent. He added, however, that the pace of the zinc sell-off in the past couple of weeks feels excessive.
"Backwardations remain fierce. Those shorts could be heading into a bear trap. When they have to roll, it's going to be very costly - we could see a (price) bounce." The price of zinc on the London Metal Exchange ended down 1.5 percent at $2,854 and closed the quarter down 12 percent - its worst performance since the third quarter of 2015.
Three-month LME copper ended up 0.1 percent at $6,626 a tonne but closed the quarter down 1 percent. Nickel closed up 0.7 percent at $14,890, its best quarter since the quarter ended December 2017, while lead closed up 0.5 percent at $2,410, ending the quarter up 0.6 percent amid an environmental crackdown in China.
World stocks rallied, recovering from a volatile week pegged to a growing US-led trade battle with other top global economies, with those concerns pushed to the backburner for now. Shareholders at sanctions-hit Russian aluminium producer Rusal elected a new board of directors on Thursday in an effort to appease the United States and have the restrictions lifted.
Premiums for Japanese aluminium shipments for July to September were set at $132 a tonne, up 2 percent from the previous quarter on rising spot premiums in the United States and supply uncertainty caused by sanctions on Rusal. Tin closed up 0.8 percent at $19,750, having touched its lowest since late December, while aluminium ended down 1 percent at $2,133, having touched its lowest since early April.
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