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Falling 0.9% during the morning session and continuing its downward trend, zinc’s three-month price is drifting further from its nearby resistance level of $2,900 per tonne.
Hampered by persistent tightness across nearby spreads, market sentiment towards zinc remains bearish, with its impact felt in gradual dips in LME prices and physical premiums.
Zinc’s cash/three-month spread has widened from a backwardation of $60.25 per tonne on Monday to $50.75 per tonne this morning, while its July/August spread is in a backwardation of $16 per tonne.
“Failure to attract fresh buying from the already low level could leave the zinc complex vulnerable to further selling,” Metal Bulleting analyst Andy Farida said.
“But after the 10.3% decline since its June 6 high of $3,220 per tonne, we think the zinc market is ready to consolidate and give in to some short-covering,” he added.
Elsewhere, copper prices have similarly shed most of the early-June gains, ticking 0.2% lower and dipping below the $6,800-per-tonne support level.
Tense trade relations between the US and its key allies are continuing to threaten the global economy, with the US’ recent threat of 20% tariffs against EU car imports a further indication of the volatile trade environment.
Nickel’s three-month price has fallen 5% this week, edging from Monday’s high of $15,390 per tonne to a low of $14,620 per tonne in the morning session.
Marginal dips in the three-month aluminium and lead prices are a further indication of broad pressure, with both metals spending much of June in positive territory amid notable sell-offs in copper, zinc and nickel prices.
For aluminium, a gradual decline from the $2,200-per-tonne support level is being buoyed by tight spreads, with its cash/three-month spread in a backwardation of $6 per tonne and the nearby July/August spread tighter at $23 per tonne.
Tin was the only metal to trade positively over the morning period, edging 0.1% higher despite the metal’s broad downtrend eyeing a dip back below $20,000 per tonne.
Base metals under pressure; tin fights back
Currency moves and data releases