Just about two months ago Zinc made a rally. Despite the encouraging moves, it was hard to imagine this metal hitting record highs in a bearish commodity market.

Zinc three-month London Metal Exchange price (one-year out). Source: MetalMiner.

Last month, Zinc fell 10% as it couldn’t overcome resistance at $2,400 a metric ton. The metal is still the best performer among industrial metals and deserves some credit. If we saw a move upward in commodity markets we would expect zinc to rise to new levels but as long as markets remain bearish all we can expect for zinc is to stay range-bound.

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Similarly, lead prices surged in April but, as we expected, the rally didn’t last too long. Prices fell 12% in May.

Lead, three-month London Metal Exchange price (one-year out). Source: MetalMiner.

What This Means For Metal Buyers

When the dollar is bullish and commodities bearish, industrial metals tend to fall. Metals in surplus have a tendency to fall sharply while those with better fundamentals have a hard time rallying and usually stay range-bound at best.

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