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LME Zinc hits fresh decade high of $3400 on supply squeeze

10 Jan 2018

LME three month Zinc hit decade high of$3400 on Tuesday amid expectation of supply deficit and falling stockpiles at LME warehouses.

Societe Generale expects the zinc market deficit at 350,000 tonnes last year and this year after a deficit of 200,000 in 2016. It sees world refined metal production to rise to 14 million tonnes this year from 13.80 million in 2017.

Shortages have led to a drawdown of inventories at both LME and SHFE warehouses. Also signaling tightness in physical market is backwardation between LME Cash to Three month. LME Cash traded at a premium of around $15 a tonne on Tuesday. (Source – KCSPL Research & Reuters)

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