Prices for zinc fell on Friday after rising stocks and stagnant demand for metals in China, despite the world’s top consumer removing COVID-19 controls.
At 1110 GMT, three-month zinc on the London Metal Exchange (LME) was down 1.7 percent at $3,325.50 a tonne, after improving 12 percent year-to-date.
Zinc stocks in the LME have sunk to their lowest since 1989, but have soared in China. Inventories at warehouses registered on the Shanghai Futures Exchange have more than doubled to 91,616 tonnes since Jan. 20, according to data released Friday.
Edward Gardner, a commodity economist at Capital Economics, said this shows that demand for metals in China will take time to increase. “We think metals prices will struggle to rise this quarter, (and) if anything they will fall a bit, before starting a more sustainable rally towards the middle of the year,” he said.
*The copper in the LME it held up better and rose 0.4% to $ 9,089 a tonne, supported by fears that disruptions in the main regions producing the red metal – Latin America and Africa – could reduce supply.
However, the planned disruption of production at Peru’s huge Las Bambas copper mine has not yet caused too much concern in Chinese smelters.
Investors were waiting for the U.S. nonfarm payrolls report, which is due at 1330 GMT and is expected to show an increase of 185,000 jobs.
In other base metals, aluminium on the LME it lost 1% to $2,591.50 a tonne; the nickel down 0.7 per cent at $29,585; tin fell 1.8 percent to $28,850; and lead rose 0.1 percent to $2,136.