LONDON, May 12 (Reuters) – The London Metal Exchange (LME) zinc price has bounced by 20% from its March low of $1,685 a tonne to $2,020.
This is part of a broader mini-recovery across the base metals complex as the market focuses on the supply shock running alongside the demand shock caused by the spread of the coronavirus.
Lockdowns and quarantine measures have taken a particularly heavy toll of the zinc supply chain, with mine closures in key producer countries such as Peru and Mexico.
Analysts at Goldman Sachs estimate that 25% of global zinc mine supply has been forced either to shut down completely or curtail operations.
However, the title of the bank’s April 21 research note – “The recent zinc rally is a churn not a turn” – tells you that Goldman does not expect much more price upside.