Some large deliveries into LME warehouses have spooked an already-nervous zincmarket. As a result, prices have fallen further. After the initial 30,875-tonne stockincrease on August 10, sent zinc prices down to $1,730/tonne, they rebounded to$1,849/tonne, but have since ploughed lower, reaching $1,694/tonne on MondayAugust 24. The sell-off following the March-May rally that reached $2,405/tonne hasbeen relentless. Prices are down 29.5% from the May peak and down 14.5% from theMarch low. Given that zinc bulls presumably still expect mine supply to tighten upnext year as mine closures take hold, this sell-off is likely to be providing a significantlong-term buying opportunity. But the market is now so nervous and the pricegyrations so large that would-be buyers are probably fearful of getting involved untilsome stability returns. This is creating considerable pent-up demand.
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