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Zinc is on course to reach $4,000 in the next month, which will be its biggest monthly increase since January

Zinc reached a four-year peak near $4,000 on Friday, and was on track for its largest monthly gain since January. Available stocks at the London Metal Exchange were shrinking as investors renewed their concerns about market tightness.

The benchmark three-month Zinc on the London Metal Exchange rose 1.6% to $3,947 per metric tonne as of 0900 GMT. It had earlier reached $3,955, which was its highest level since May 2022. Zinc is used to galvanize steel and was expected to gain 8.2% in August. This would be its strongest month since January. This week, it is up by 3.2% and heading towards a sixth consecutive weekly increase.

The LME will be closed Monday, August 15, for the British bank holiday.

LME stock data showed that 19,125 tons of zinc were cancelled on Thursday or ordered to be removed from?warehouses, mainly in Singapore. This reduced the amount of zinc available in LME warehouses 75,600 tonnes, or two days' global consumption.

Neil Welsh, Britannia Global Markets' head of metals, wrote that "Zinc’s outperformance reflects an increasingly visible physical shortage" in a recent note. "LME inventories are down sharply, and mine and smelter interruptions have limited refined availability."

Time spreads showed a tightening of the market immediately, with the premium for the cash LME Zinc contract being higher than the forward three-month price. Around $245 per ton. Shanghai Futures Exchange Zinc closed only 0.1% higher on Friday in China. The'relatively high' figure of 153,669 tonnes is a slight decrease from the previous weeks but remains high. Exports of Chinese zinc have helped to ease fears about a shortage in other countries.

LME copper prices rose 0.6% to $14,363 per ton, aided by a combination of low inventories and cancellations of warrants. This metal is set to achieve a weekly increase of around 4% and a rise of nine straight weeks.

SHFE Copper Stocks The?total?of 72,428 tonnes fell?by 19.1% this week.

Nickel grew 0.3% at $16,925, while tin climbed 0.4% to $55,425. Aluminium was unchanged at $3,234.50. Lead fell 0.1%, and nickel grew 0.3%. (Reporting and additional reporting by Solomon Cefai, Editing by Subhranshu Sahu; Jan Harvey, Barbara Lewis and Subhranshu Sahu)

(source: Reuters)