Zinc extended its rally to a 10-month high amid expectations for a global shortage of one of this year’s best-performing commodities. Shares of companies producing the metal rose.
Zinc, used for rustproofing steel in everything from auto bodies to suspension bridges, has surged 23 percent in 2016, outperforming other base metals. Banks from Goldman Sachs Group Inc. to Macquarie Group Ltd. see further gains for prices that have risen for six straight days.
Glencore Plc and Nyrstar, Europe’s top refined metal producer, curbed output from mines last year after prices plunged amid the worst rout since the global financial crisis in 2008. Operations such as Vedanta’s Lisheen in Ireland and MMG Ltd.’s Century in Australia have also closed. Goldman last month dubbed zinc the “bullish exception” among metals, highlighting its positive prospects in contrast to the outlook for copper and aluminum.
“Zinc has a strong uptrend behind it,” Andrew Silver, a broker at Triland Metals Ltd., said by phone. “Prices are moving in advance of tighter fundamentals. Some of the fund money has come toward zinc. If demand holds up, the physical surplus will get eaten away.”
Zinc for delivery in three months climbed as much as 1.7 percent to $2,004 a metric ton and traded at $1,983.50 by 10:26 a.m. on the London Metal Exchange. A sixth successive gain would be the longest run since March. On the Shanghai Futures Exchange, zinc surged as much as 4.2 percent.
For the rest of this article, click here: http://www.bloomberg.com/news/articles/2016-06-02/zinc-rally-lifts-prices-toward-2-000-as-investors-see-shortage