Zinc hits 10-month low as investors bet on supply

LONDON — Zinc prices hit their lowest in 10 months on Friday as traders eyed rising stocks and bet on increased mine supply, while bellwether copper clocked a second week of falls on fears a trade war between Washington and Beijing would hit demand.

Zinc stocks in London Metal Exchanges ( LME) warehouses stood at 247,250 tons at last count, up 87% since March 1 this year. Some 880,000 tons of additional zinc mine capacity is due to come on stream this year, according to the International Lead Zinc Study Group.

“With zinc there’s consensus that prices will eventually move lower because of incoming mines and we think demand has been impacted by high prices,” said Macquarie analyst Vivienne Lloyd. “Maybe it’s not quite ready yet, but it will end the year lower than is today.”

Copper was hit by increasingly sharp rhetoric between the US, China and the European Union ( EU), and growing evidence of the economic damage such a conflict could produce, though it was underpinned by a weaker dollar.

Three- month LME zinc hit $2,889.50 a ton, its lowest since last year August. It ended flat at $ 2,917 a ton, clocking a fall of nearly 5% for the week — its second weekly fall in a row.

Copper closed flat at $ 6,789 a ton but ended the week down 3.2%.

US President Donald Trump threatened to impose a 20% tariff on all EU-assembled cars coming into the US on Friday.

Germany’s Daimler last week cut its 2018 profit forecast and BMW said it was looking at “strategic options” because of a trade war between China and the United States, sparking fears of a wave of earnings downgrades in autos.

The global refined copper market had a surplus of 55,000 tons in March and 87,000 tons in February, the International Copper Study Group said.

Indonesia’s refined tin exports in May surged 79% to 12,493.35 tons, data from the Trade Ministry showed on Friday.

Aluminum closed down 0.20% at $2,175.50 a ton, lead closed up 1.7% at $2,414.50, tin ended down 0.50% at $20,400 while nickel closed up 1.9% at $15,270. —