Zinc and copper driven up by supply fears before retreating on strong dollar
LONDON: Zinc prices hit a more than four-year high on supply worries while copper touched a seven-month peak on Tuesday before retreating under pressure from a stronger dollar and a global bond selloff. Benchmark three-month zinc on the London Metal Exchange was up 1.3% at $3,933 a metric ton by 1020 GMT after touching $3,990 for its highest since May 2022. Stock markets tumbled on Tuesday and…
Zinc and copper prices experienced an increase driven by supply concerns, only to retreat due to a stronger dollar and a global bond selloff. On the London Metal Exchange, benchmark three-month zinc rose 1.3% to $3,933 a metric ton, reaching its highest level since May 2022. Copper prices peaked at $14,441.50 a ton, its highest point since January 29, before declining slightly to $14,218.
The stronger dollar made commodities priced in U.S. currency more expensive for buyers using other currencies. The situation was exacerbated by renewed fighting in the Middle East, which led to a surge in bond yields. Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen, noted that supply tightness is the primary concern in industrial metals.
Zinc inventories in China declined sharply, with spot purchasing concentrated in deliverable brands. Falling refined zinc inventories outside China, tight raw material supply, and speculative buying contributed to the metal's price surge.
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