Zinc slides as inventory arrivals ease supply fears
Adds analyst comment and LONDON dateline, updates prices
By Eric Onstad
LONDON, Oct 25 (Reuters) -Zinc prices slumped on Friday, retreating from the previous session's 20-month high, as inventory inflows calmed worries about potential shortages.
Most other industrial metals on the London Metal Exchange were also in the red, weighed down by the lack of robust stimulus measures in top metals consumer China and caution ahead of the U.S. presidential election.
Three-month LME zinc CMZN3 slid 3.6% to $3,059 a metric ton by 1000 GMT after touching its highest since early February 2023 on Thursday.
"There have been a lot of shenanigans in the zinc market this week and some of that is deflating, so that is helping to drag down the rest of the market," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
One party had taken control of up to 79% of available zinc stocks in LME warehouses, creating concern about short-term availability of metal, but that dissipated after large inflows.
LME data showed net arrivals of 10,275 tons of zinc into Singapore storage facilities over the past two days, raising total stocks to 242,425 tons MZNSTX-TOTAL.
The premium of cash LME zinc over the benchmark three-month contract CMZN0-3 jumped to $58 a ton on Wednesday, its highest since September 2022, but tumbled to $1 on Friday.
Among other metals, LME aluminium CMAL3 dropped 1.2% to $2,617.50 a ton, retreating from a multi-month high hit in the previous session, while copper CMCU3 was little changed at $9,509.
"Risk appetite is on the low side and positions are being kept relatively small because the U.S. election is too close to call and the impact could have binary outcome," Hansen said, adding that a victory for Donald Trump could bring tariff threats for China.
The most-traded December copper contract on the Shanghai Futures Exchange (SHFE) SCFcv1 closed 0.2% down at 76,390 yuan ($10,723.51) a ton.
LME copper was on track for a fourth straight weekly decline. SHFE copper posted its third straight weekly loss.
LME nickel CMNI3 eased 0.7% to $16,180 a ton, lead CMPB3 slipped 0.8% to $2,058.50 and tin CMSN3 was down 0.3% at $31,050.
($1 = 7.1236 yuan)
Reporting by Eric Onstad
Additional reporting by Mai Nguyen in Hanoi
Editing by David Goodman
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