Zinc retreats after Chinese property market data points to cooling

LONDON — Zinc prices fell back on Tuesday amidst profit taking and producer selling, but copper and other base metals gained on worries about supply shortages.

Earlier in the session prices were weighed on by Chinese home price data pointing to a significant cooling in the country’s biggest property markets, construction being a key market for industrial metals.

Zinc was also hit by another rise in so- called live inventories in London Metal Exchange ( LME) warehouses, indicating that supplies were still available despite the closure of big mines.

“We’re giving back a bit because we had a really strong day yesterday. I suspect there was some producer selling coming in on copper, zinc and possibly aluminum,” said Robin Bhar, head of metals research at Societe Generale in London. “But with supply issues dominating many of the metals, momentum is still on the upside and any dips should be well supported.”

Benchmark LME zinc closed down 0.80% at $2,794 a ton after gaining 1% on Monday. Onwarrant stocks of zinc in LME-registered warehouses — those not earmarked for delivery and therefore available to investors — climbed 10,500 tons on Tuesday and have nearly doubled since last week.

The inflows reminded investors that hundreds of thousands of tons of “hidden” inventories were estimated to be in non-LME warehouses, but the current inflows were probably linked to the expiry of the LME July contract on Wednesday, Mr. Bhar said.

“We’ve seen big arrivals before when there are shorts electing to deliver,” he said.

Three-month LME copper finished up 0.20% at $6,007 a ton, after climbing 1.20% in the previous session, when prices hit fourand-a-half-month highs.

LME aluminum ended 0.60% firmer at $1,931 a ton as investors worried about an environmental crackdown in China to close polluting smelters. Nickel climbed 1.90% to close at a four- month high of $9,780, lead was bid down 1% to $2,274 and tin added 0.40% to $20,000. —