Column: LME zinc running on empty as stocks keep falling – by Andy Home (Reuters U.K. – March 19, 2019)

LONDON (Reuters) – Another 100 tonnes of zinc were loaded out of the London Metal Exchange (LME) warehouse system on Monday. It wasn’t the most dramatic of moves but sufficient to reduce LME stocks to a fresh 12-year low of 58,325 tonnes – less than two days’ worth of global consumption and within touching distance of this century’s nadir of 58,100 tonnes recorded in October 2007.

Such desperately low inventory has rekindled zinc’s bull flames. The LME three-month price rose to an eight-month high of $2,882 per tonne last week, up 18 percent this year, before easing slightly to current levels of $2,800.

Time spreads remain tight and volatile but the premium for cash metal has so far failed to attract anything more than a smattering of fresh deliveries. The persistent tightness of LME stocks is forcing a collective rethink about the outlook for zinc, particularly the much anticipated shift to supply surplus.


LME zinc stocks have fallen by 1.18 million tonnes from their 2012 peak. The exchange’s stock reports have thrown up many surprises over the intervening years, with the downtrend sporadically interrupted by mass movements of off-market metal onto LME warrant, particularly in New Orleans.

But the New Orleans zinc round-about appears to have ground to a halt. The last significant inflow at the port was in October and there have been no arrivals at all this year.

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