Zinc stocks on the LME have sunk to the lowest levels since 1989 but have soared in China. Inventories in warehouses registered with the Shanghai Futures Exchange have more than doubled to 91,616 tonnes since Jan. 20, data showed on Friday in the first such report since China's Lunar New Year holiday. That was evidence that metals demand in China will take time to increase, said Edward Gardner, commodities economist at Capital Economics. "We think that metals prices will struggle to make gains this quarter, (and) if anything fall a little bit, before starting a more sustainable upturn around the middle of the year," he said. "Zinc is not just used for helping to produce steel, but it is used in many consumer goods; and with advanced economies entering or flirting with recession in the first half, demand will be weak early this year." LME copper shed 1% to $9,039 a tonne, the lowest since Jan. 11, despite worries that disruptions in major copper producing regions Latin America and Africa could tighten supply. An expected halt to output at the huge Las Bambas copper mine in Peru, however, has yet to cause too much concern at Chinese smelters.
"The news has sent treatment charges offers lower, but trading was very thin because many smelters are sitting on adequate stocks and not concerned about their first-quarter supply," a source at a Chinese smelter said.
Miners pay smelters treatment charges to process concentrates into refined metal.
Among other metals, LME aluminium lost 1.7% to $2,573 a tonne, nickel tumbled 4% to $28,600, tin dropped 3.8% to $28,255 and lead slipped 1.3% to $2,106. For the top stories in metals and other news, click (Reporting by Eric Onstad Additional reporting by Siyi Liu and Dominique Patton in Beijing Editing by David Goodman, Jane Merriman and Louise Heavens)
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