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London Metal Exchange zinc spreads are stressed, with the cash-to-three-months premium hitting a one-year high of $63 per tonne earlier this week.
LME stocks are low, at just 99,900 tonnes excluding metal earmarked for physical load-out. Sign Up for the Copper Digest Sign Up
It’s the same story in Shanghai.
Physical tightness in the refined segment of the market, it seems, is not going to go away any time soon, either in Shanghai or in London.
Shanghai Futures Exchange (ShFE) zinc spreads are also in backwardation, while the premium for metal in bonded warehouses shot to multi-year highs in September.
ShFE stocks have rebuilt slightly since the start of the month to 53,500 tonnes. But that’s still well short of the 160,000 tonnes that were there as recently as April.
“Screamingly bullish” is how analysts at Citi described the Shanghai market earlier this month.
Not the sort of headline you’d expect in a market that is weighed down by expectations of a looming supply surge.
The feast, however, has been postponed, leaving the physical supply chain hungry for units. ILZSG moves the goal-posts
The International Lead and Zinc Study Group (ILZSG) made some interesting revisions to its supply-demand forecasts in its October assessment of the zinc market.
The group increased its expected global supply deficit this year to 322,000 tonnes from the 263,000 tonnes forecast at its last meeting in April.
Trying to predict...
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