Zinc’s price slumps as backwardation collapses

摘要

The backwardation in zinc’s forward spreads on the LME has dissipated for now with the unwinding of the dominant cash long position(s), which pushed the market to record backwardation levels in May and June, helping to push zinc’s cash price down by $250/t in early July. We believe that there is further downside risk to prices against a backdrop of rising Chinese smelter output and weakening demand.