Zinc prices on the London Metal Exchange (LME) have surged to their highest level in 18 years, with raw material shortages driving the metal to its best monthly gain since 2006. The three-month zinc contract rose 20.8% in April, marking a significant milestone for the base metal.
According to a trader, the tightness in raw material supply for zinc is similar to the situation seen in the copper market. Smelters are facing a shortage of zinc concentrate, the key raw material for producing refined zinc, leading to a significant drop in treatment charges in China.
Investment funds have also been pouring into the base metals sector, seeking to hedge against inflation and capitalize on the potential for increased demand from sectors such as renewable energy and electric vehicles. China’s manufacturing sector, which is a major consumer of base metals, saw slower growth in April compared to March.
In addition to zinc, other base metals have also seen positive price movements. LME copper reached $10,173 per ton, while nickel advanced to $19,245 per ton. However, tin, aluminum, and lead experienced slight declines.
Overall, the base metals sector is seeing increased interest from investors, with both LME and SHFE copper set for their best month since February 2021. The outlook for the sector remains positive, with continued inflows of funds expected to support prices in the coming months. Keep an eye on the base metals market for more exciting developments in the near future.
