In some of the most bullish news heard in recent months, zinc stockpiles monitored by the London Metal Exchange (LME) saw their biggest decline in three weeks after topping a 17-year high of more than 1 million tonnes last month.
Despite continued increases in mine production amid weakened demand in key Chinese, American, and European manufacturing markets, zinc prices rebounded from sub-$1,800/ton prices to regain the $1,845/ton cash price mark by mid-week.
But inventories of the metal, which is used to protect steel from corrosion, remain high at 992,300 metric tons, an increase of 21 percent this year according to the LME. And strong production numbers out of China are in contrast to wavering consumption in overheated manufacturing and real estate markets.
Overall, zinc prices have not changed much since the year began, falling only 1.3 percent. That makes the metal the best performer among the LME’s six main non-ferrous metals.