Zinc rallied to its highest in nearly 15 months on Wednesday as investors continued to fret over a shortage of mine supply, while other metals surged amid sharp falls in the dollar. The US dollar fell broadly on Wednesday as US Treasury yields fell and investors waited on a speech by Federal Reserve Chair Janet Yellen later this month. A weaker dollar makes dollar-priced metals cheaper for non-US investors.
"In copper, it appears to be exogenous factors like the dollar," said Standard Bank analyst Leon Westgate. On zinc, he said prices still had further to rise: "(Some investors) are saying they want to see premiums tighten up. I imagine we're going to see that towards the end of this year. At that point anyone still sitting on the fence will jump in."
Three-month zinc on the London Metal Exchange ended up 0.5 percent at $2,286 a tonne, having earlier hit its highest since mid-May 2015 at $2,314.50. Prices are up 43 percent this year. "It seems the market has a big zinc buying order through," a trader said. Latest LME data showed a 29,900 tonne increase in zinc on-warrant or available stocks to 437,725 tonnes, the highest since November 2015.
Copper closed up 0.9 percent at $4,822, having earlier hit a one week high at $4,888.50. Confidence in copper's outlook is fading as the impact of Chinese monetary stimulus wanes and markets focus once more on oversupply. Zambia's copper production climbed 8 percent to 368,371 tonnes in the first six months of this year versus the same period last year, the country's chamber of mines said.
Nickel, used primarily to make stainless steel, ended up 0.7 percent at $10,850, having earlier hit its highest since August 2015 at $11,030. Global production of stainless steel was 0.4 percent higher in the first quarter than in the same period of 2015 as Chinese mills ramped up their output, indicating strong nickel demand. Tin closed up 0.7 percent at $18,550, having earlier hit its highest since February 2015 at $18,650. Aluminium ended up 0.3 percent at $1,647, having earlier hit its highest since mid-July at $1,666.50, while lead ended 0.8 percent higher at $1,819, having hit its highest since late July at $1,851.50.