Zinc prices, along with nickel, rallied to hit multi-month highs last week as investors hedged on continued supply disruptions.
According to a report from the Financial Times, the zinc price climbed to its highest point in 14 months to $2,275.5 per metric ton on the London Metal Exchange. Investor sentiment surrounding commodities has improved due in part to a weaker dollar and growing oil prices, in addition to government stimulus in China. That stimulus has enhanced the Far East nation’s transportation and infrastructure sectors.
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Meanwhile, nickel could reach as high as $12,000 per metric ton.
“You could easily be forgiven for thinking the market has now become the London Nickel Exchange as … that is where most of the volume is trading and suggests that for the moment it has become the favoured metal of the speculators,” Malcolm Freeman, director at Kingdom Futures, told the news source.
Back to zinc, which has seen its price more than 40% higher in 2016 following a number of mine shutdowns. Citing data from the International Lead and Zinc Study Group, the global zinc market deficit hit 68,700 metric tons in the first five months of 2016, compared to the supply surplus of 177,000 metric tons over the same time in 2015.
Global stocks rally, metals see gains
In his week-in-review, our own Jeff Yoders wrote that global stocks rallied, and metals along with them last week, with precious metals helped by Brexit and sustained despite neutral fundamentals.
“Yet skulking under this prosperity lies a specter that threatens to erode prices and even affect the positive performance of those stock markets: Chinese overproduction,” Yoders wrote.
You can find a more in-depth zinc price forecast and outlook in our brand new Monthly Metal Buying Outlook report. Check it out to receive short- and long-term buying strategies with specific price thresholds.