London zinc prices slip to worst quarter since 2015

LONDON — Zinc prices slipped on Friday, notching up their worst quarter since 2015 with investors sceptical of reports that Chinese smelters plan to cut output by 10% in response to low prices and treatment charges.

China’s largest zinc smelter said it would not participate in the output cuts that were reported on Thursday, while doubts emerged over whether other smelters would fully comply.

“If you’re going to cut smelter production you’re going to slow down concentrates purchases, but we haven’t seen that,” said ING commodities strategist Oliver Nugent.

He added, however, that the pace of the zinc sell-off in the past couple of weeks feels excessive.

“Backwardations remain fierce. Those shorts could be heading into a bear trap. When they have to roll, it’s going to be very costly — we could see a (price) bounce.”

ZINC: The price of zinc on the London Metal Exchange (LME) ended down 1.5% at $2,854 and closed the quarter down 12% — its worst performance since the third quarter of 2015.

COPPER: Three-month LME copper ended up 0.10% at $6,626 a ton but closed the quarter down 1%.

NICKEL AND LEAD: Nickel closed up 0.70% at $ 14,890, its best quarter since the quarter ended December 2017, while lead closed up 0.50% at $2,410, ending the quarter up 0.60% amid an environmental crackdown in China.

TRADE WAR: World stocks rallied, recovering from a volatile week pegged to a growing US-led trade battle with other top global economies, with those concerns pushed to the backburner for now.

RUSAL: Shareholders at sanctions-hit Russian aluminum producer Rusal elected a new board of directors on Thursday in an effort to appease the United States and have the restrictions lifted.

ALUMINIUM PREMIUMS: Premiums for Japanese aluminum shipments for July to September were set at $132 a ton, up 2% from the previous quarter on rising spot premiums in the US and supply uncertainty caused by sanctions on Rusal.

METALS PRICES: Tin closed up 0.80% at $ 19,750, having touched its lowest since late December, while aluminum ended down 1% at $ 2,133, having touched its lowest since early April. —