Zinc surges after snowstorm

- Publishing Date
- 16 Nov 2009 12:52pm GMT
- Author
- Mining Journal
Zinc climbed to the highest level in more than 17 months in Shanghai on speculation China’s worst snowstorms in decades may have disrupted supplies in the world’s largest producer and consumer of the metal.
China’s heaviest snowfalls in 60 years killed at least 19 people, flattened homes and left thousands stranded in central and northern provinces, according to government estimates. Bad weather 20 months ago caused power outages and halted output at some of the country’s largest metal producers and processors.
"Some producers in Henan province may be facing delivery problems," said Jiang Donglin, research department manager at Shenzhen Zhongjin Lingnan Nonfemet Co. "The situation is nowhere as bad as last February. We’re not hearing about halts in production."
Shanghai zinc for February delivery on the Shanghai Futures Exchange gained as much as 2.5% to Yu17,750/t (US$2,600/t), the highest since May 28, 2008. It ended the day at Yu17,505/t. Zinc for delivery in three months in London gained as much as 2.7% to US$2,232/t.
"It’s a short-term spike as speculators jump in to try and make a quick buck," said Jiang. "Supplies aren’t tight at the moment."
Stockpiles of zinc in Shanghai warehouses stood at 161,704t last week, the most since the exchange started trading zinc futures in April 2007.
(Bloomberg, November 16)

Comments