Zinc snaps six-day rally as rising stocks ease tightness

London saw a drop in zinc prices on Thursday as growing inventories dampened worries about supply constraints outside China, ending a six-day rally that pushed the metal to its highest level in four years. The London Metal Exchange's three-month zinc benchmark slipped by 1% to $3,855 per metric ton by 1002 GMT. It had reached $3,949.5, its peak since June 2022, on Wednesday.

According to the latest London Metal Exchange data, zinc stock levels surged to a three-week high of 97,875 tons, following 1,100 tons of inflows into LME-registered warehouses in Singapore and Hong Kong. Experts anticipate additional influxes to the inventory, primarily from China, as the difference between the LME cash zinc contract and the benchmark climbed to $199 per ton on Wednesday, the highest since December, up from a discount of $25 three months earlier.

To alleviate supply concerns, the global refined zinc market was in a surplus of 120,000 tons during the first half of 2026, with total reported inventories rising by 92,000 tons, as stated by an industry association. Refined zinc production grew by 1.3%, spurred by growth in China, while consumption increased by 0.6%. Copper saw a 0.5% decline to $14,177.50 per ton in a cautious trading session as market participants eagerly awaited Federal Reserve Chair Kevin Warsh’s speech on Friday for additional insights into the trajectory of U.S. interest rates.

Copper had hit a record high of $14,349.5 on Tuesday and had reached its highest level since January of $14,437 on Wednesday due to worries about tight inventories outside the U.S. "Copper’s latest record high prompted profit-taking rather than sustained buying, suggesting that prices may have risen as far as they can for now," Ole Hansen, head of commodity strategy at Saxo Bank, commented.

LME aluminium fell 0.7% to $3,204, lead dropped 0.5% to $1,900, tin eased 0.2% to $54,655, and nickel declined 0.5% to $16,795.