Zinc prices crumbled on Thursday, April 26, following rising inventories while aluminium extended losses as investors priced in a loosening of U.S. sanctions affecting giant Russian producer Rusal.
Zinc stocks in warehouses certified by the London Metal Exchange MZNSTX-TOTAL have jumped by 26 percent this week after rising by a further 18,675 tonnes on Thursday.
The amount of cancelled inventory — stock earmarked for delivery — was very low at 5.4 percent, LME data showed.
“The real interesting data point is not just the arrivals but (the) cancelled stock,” said Oliver Nugent, commodities strategist at ING in Amsterdam.
“You had deeply held trader stocks and those stocks have now been unwound, so that makes metal more available and the tightness is coming off the boil.”
In February Zinc touched its highest in more than a decade at $3,595.50 a tonne on supply concerns after closures and suspensions of big mines in recent years, but many operations have resumed production.
Benchmark LME zinc was down 0.8 percent at $3,111.50 a tonne by 1000 GMT, having dropped by 2.4 percent on Wednesday.
Shanghai zinc was the biggest loser in the base metals complex, closing 3 percent down at 23,685 yuan a tonne.
Three-month LME aluminium shed 1.7 percent to $2,207, as investors continued to liquidate after the extension this week of the deadline for compliance with U.S. sanctions on Rusal, one of the world’s biggest aluminium producers.
The metal is down about 18 percent from the $2,718 seven-year high hit on April 19 after the original sanctions announcement raised concern over potential aluminium shortages, Reuters reports.
