Zinc hits three-month low as supply fears ease

LONDON — Zinc hit a threemonth low on Monday and copper also fell as supply concerns eased and demand remained weak in top metal consumers such as China.

Shortages of zinc concentrate — partly processed ore — are easing, according to a report by the Chinese state-supported research institute Antaike cited by Commerzbank.

Zinc prices touched a peak of $2,980.50 a ton in mid-February on worries that major mine closures last year would lead to severe shortages.

“Smelters are apparently able to secure sufficient supply so long as they are prepared to pay the requested prices,” the German bank said in a note. “Globally speaking, zinc supply has already been rising again since September.”

London Metal Exchange ( LME) three- month zinc slid 2.70% to close at $2,618 a ton, the weakest since Jan. 6. Also pressuring the market was weakness in Chinese steel prices and news that two flood-hit mines in Peru were ready to restart.

LME copper dropped 1.50% to end at $5,747 a ton, adding to small losses in the previous session, having broken support at its 100-day moving average at $5,800 a ton.

Prices have faltered since shipments resumed from the world’s two biggest copper mines after being disrupted earlier this year.

“The supply disruptions that we have seen were short- term dynamics and did not create real tightness in the market. We wouldn’t be too surprised if the copper market ends the year in a slight surplus,” said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.

“I think that the market is digesting the slowing down of the global picture… which is not good for the state of demand in the second half of the year.”

The discount of cash LME copper to the three-month contract was $30.85 a ton after closing on Friday at $35.25, the biggest discount since June 2013, indicating that supplies were adequate.

Hedge funds and money managers cut their net long position in US copper futures for the first time in three weeks, data showed.

The LME price ended unchanged at $10,180, balanced by potentially bullish and bearish news. A suspended Philippine nickel miner has asked the President to allow it to ship ore stockpiles after some cargoes were seized.

Among other industrial metals, LME aluminum shed 1.80% to close $1,926.50 a ton, lead added 0.30% to end $2,258 and tin rose 0.20% to $20,275. —