Zinc’s underlying price on the LME was recently seen at $1,888.50 per tonne, while turnover was high at more than 2,000 lots exchanged as at 9.50am London time.
Buying momentum in LME zinc was also supported by this morning’s freshly booked cancelation, which saw some 8,025 tonnes booked out of LME-registered warehouses in Kaohsiung, and a further 800 tonnes freshly canceled in Vlissingen, where the bulk of LME zinc stocks remain.
Forward spreads for the galvanizing metal on the LME remain wide, but have narrowed across Asian trading hours. Zinc’s benchmark cash/three-month spread was recently seen in a $8.75-per-tonne contango, more than half the levels seen last week.
“China’s official manufacturing PMI has surprised on the upside, rising to 52 in March, from the low of 35.7 in February. The Bloomberg consensus, meanwhile, forecasted 44.8 in March, which is still a contraction in industrial activity, while in fact the production recovery seems to be happening faster than the market expected,” VTB Capital’s head of metals and mining research Dmitry Glushakov said in a morning note.
“This adds weight to our thesis that, in the wake of China restarting, other countries face lockdowns which might force the base metals markets into a shortage in the near term, thus supporting prices,” he added.
Elsewhere in the complex, the three-month copper price was also higher over the morning, recently trading at $4,827.50 per tonne, while turnover was moderate at some 4,800 lots exchanged as of 10:05am London time.
Similarly, forward spreads in LME copper have narrowed amid futures buying, with the red metal’s cash/three-month spread recently trading in a $8-per-tonne contango, narrowing from $15.50 per tonne last week.
Other highlights
- In other commodities, Brent crude oil futures were up by 2.46%, recently trading at $27.08 per barrel.
- The US dollar index was recently trading 0.51% higher at 99.60.
- In data from the United Kingdom this morning, the country’s current account figure for the March period was recorded at a deficit of £5.6 billion ($6.94 billion), narrower than an expected deficit of £7 billion.
- From the European Union, the German unemployment change for the March period was much better than expected at 1,000, from an expected 23,000.
- Later, the United States will release data on its Chicago PMI in addition to the Conference Board’s reading of consumer confidence.