Zinc Highlights

摘要

LME zinc prices are racing away, with $2,000/tonne now in their sights. In fact, zinc looks like the most robust of the base metals at the moment, as it is the only one comfortably above its October peak. While we were forecasting higher prices in December, we do not believe that there is any good fundamental reason to justify this outperformance. What we do note, however, is warming sentiment towards this metal from market participants. The feeling is that genuine fundamental tightness may lie ahead in the next few years for the first time since 2007, as mine supply growth slows. We have seen this optimism before in zinc - and for the same reason - only for it to be quashed by explosive growth in Chinese mine supply.