Zinc up as Glencore maintains 2018 output forecast

LONDON — Zinc prices rose on Tuesday after miner and trader Glencore held its output forecast steady for next year, disappointing investors who had largely bet it would restart more capacity.

Glencore told an investor briefing it would restart its Lady Loretta mine in the first half of 2018, but added it expects zinc output to fall slightly to about 1.09 million tons from 1.10 million tons this year. In 2019, Glencore sees its zinc output creeping up to 1.16 million tons. “Based on their guidance numbers it does remain fairly constructive for zinc. The market was expecting more of an immediate supply increase,” said ING commodities strategist Warren Patterson.

He added that ING expects overall global zinc supply to rise next year, with added capacity in Australia and South Africa.

London Metal Exchange ( LME) zinc ended up 1% at $ 3,157 a ton. Seasonally strong demand from battery makers, tight supply caused by mine shutdowns and dwindling LME inventories are expected to sustain lead prices, which recently hit six-year highs.

Lead, which is mined alongside zinc, closed up 1.20% at $2,517.

The dollar rose to three-week highs against a basket of currencies as the Federal Reserve begins a two-day policy meeting widely expected to result in an interest rate hike. A strong US currency makes dollar-priced metals costlier for non-US investors.

Glencore said its expects to produce 150,000 tons of copper next year and 300,000 tons in 2019 at its Katanga mine in the Democratic Republic of Congo. The mine has restarted after a suspension dating back to 2015.

Aluminum closed down 0.30% at $2,016 a ton, copper ended down 0.10% at $6,663, nickel closed down 1.60% at $11,065 and tin closed down 1.20% at $19,165. —