March 29, 2019 / 12:06 PM / a year ago

METALS-Zinc hits 9-month peak on hopes for U.S.-China deal, shortages

* GRAPHIC-2019 asset returns: (Updates with closing prices)

By Eric Onstad

LONDON, March 29 (Reuters) - Zinc hit a nine-month peak and other industrial metals also gained on Friday, lifted by optimism about a U.S.-China trade deal and potential shortages due to low stocks and mine disruptions.

U.S. Treasury Secretary Steven Mnuchin said he had held “constructive” talks in Beijing aimed at resolving a bitter trade dispute between the world’s two largest economies.

Zinc prices have rebounded 24 percent from a low hit in early January, boosted by hopes for a trade deal.

“If they can make further progress, it removes one of the headwinds to further rallies given that the fundamentals are still pretty sound,” said Robin Bhar, head of metals research at Societe Generale in London.

“Inventories are falling, and they are critically low in zinc and nickel, while there are supply constraints in copper and zinc.”

Three-month zinc on the London Metal Exchange climbed 2 percent in closing open outcry trading to $2,923 a tonne, the highest since June 28 last year.

* ZINC TECHNICALS: Once zinc overcomes resistance at $2,906/12 it is due to extend towards $2,940/90, Stephanie Aymes, head of technical analysis at Societe Generale, said in a note.

* COPPER: LME copper gained 1.9 percent to finish at$6,482.50 a tonne, the biggest one-day gain since Jan. 25. Copper also saw its first quarterly gain since the end of 2017.

* COPPER IN PERU: Protests at Las Bambas in Peru, one of the country’s largest copper producers, showed no sign of abating days after the mine operator MMG warned it could declare force majeure on contracts.

* LME STOCKS: Stockpiles of zinc in LME-registered warehouses MZNSTX-TOTAL hit their lowest since at least 1998 while LME nickel inventories MNISTX-TOTAL touched a new low since June 2013, LME data showed on Friday.

In China, on-warrant nickel stocks fell to the lowest levels since July 2005, weekly data from the Shanghai Futures Exchange showed on Friday.

* ZINC SPREADS: The premium of LME cash zinc over the three-month contract CMZN0-3 climbed to $70 per tonne, the highest since early January, from $3.50 three weeks ago, indicating tight supply.

* RUSAL ALUMINIUM: Investor concerns about rising aluminium supply were heightened by Rusal’s announcement of new production at its Boguchansk aluminium smelter in Siberia, doubling its capacity to 298,000 tonnes a year.

LME aluminium rose 0.5 percent to end at $1,912.50 a tonne.

* OTHER METALS: Nickel, untraded in closing rings, was bid up 1.2 percent at $13,040 a tonne, lead dipped 0.1 percent to trade $2,017 and tin also fell 0.1 percent to $21,400 a tonne.

Additional reporting by Mai Nguyen in SINGAPORE, editing by Louise Heavens

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