Amelia Xiao Fu, head of commodity market strategy at Bank of China International, said the more hawkish rhetoric hit the market amid increasingly divergent views from Fed policymakers, spurring volatility. "Most market participants expect a U.S. rate hike in May, but are unsure about what the path is going to be after that," she said. An uneven economic rebound in China, the world's biggest metals consumer, is also weighing on the market, Fu added. "In China, some of the downstream metals demand is not very robust. It's recovering, but it's gradual. Most economic growth has been concentrated in the service sector."
Also dampening the market was the settlement of a dispute
between the Democratic Republic of Congo and China's CMOC Group , which will release stockpiles of copper for export.
The Yangshan copper premium , which indicates
demand for imported copper into top consumer China, was at
$27.50 a tonne on Wednesday, down 45% from nearly five weeks
ago, SMM data on Refinitiv Eikon showed.
LME zinc fell 0.7% to $2,770.50 a tonne after
touching the weakest since Nov. 4, 2022.
LME inventories have jumped 21% over the past
two days and have more than tripled over the past two months.
"In zinc, over the past couple of years there's been low
inventories coupled with mine tightness, but this year the
supply side is improving, the fundamentals are becoming more
relaxed," Fu said.
The spread between the cash and three-month zinc LME
contracts has moved to a discount of $7.75 a tonne at
Wednesday's close from a premium of $17.50 a week ago,
indicating more availability of near-term supplies.
LME aluminium eased 0.9% to $2,423 a tonne, nickel shed 1.9% to $25,065, tin fell 0.5% to $26,945
and lead gave up 0.2% to $2,152.
For the top stories in metals and other news, click or ($1 = 6.8852 yuan)
(Reporting by Eric Onstad; Editing by Shilpi Majumdar, Sherry
Jacob-Phillips, Emelia Sithole-Matarise and Deepa Babington)
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