Shortage worry jolts zinc towards 7-month high

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Shortage worry jolts zinc towards 7-month high

On Monday, the 11th of March 2019, the price of Zinc jumped, leaning towards a seven-month high hit last month, over shortage worry ahead of a season-bound strong demand in China alongside a tumbling global stock. Benchmark Zinc over the London metal exchange closed the day 1 percent higher at $2,738 a ton, after breaching as much as $2,778.00 per ton in the intra-day trading.

Nevertheless, ahead of a seasonal demand of Zinc on China amid shortage worry, Zinc price would likely to test a seven-month high at $2,810, the steel’s highest since July. Addressing to a galvanized shortfall worry, a Commerzbank analyst, Daniel Briesemann said, “The market is worried about a shortfall, though supplies should be rising this year.

The other aspect is low stocks”. Although Zinc prices are already up by 11 percent this year, analysts are expecting further upbeat momentum in the price, as the Zinc market would highly likely to experience another deficit, which would remark fourth straight year of zinc shortage in a row.

According to data from the International Lead and Zinc Study Group, there had been a zinc market deficit of 3,84,000-ton last year, while 2016 and 2017 posted a shortfall of 1,28,000 and 4,42,000 tons respectively. The second quarter of the year has usually been the strongest for the industrial grade-metals, as companies usually ramp up their construction activity between July and September.

Never the less, the Zinc price would appear to be gearing up, as Zinc inventories are at their lowest since October 2007 at 59,450 tons following an environment led crackdown of output among the top producers last year.