January 2012 | Base Metals
Oversupply will erode January’s price strength in time: Zinc - Market Analysis
Similar to the case in nickel, we have raised our forecasts this week to account for the stronger-than-expected rally in January, but the zinc market is oversupplied and the macro outlook is weak and uncertain. Against this backdrop, the run up in prices is hard to justify. We expect prices to drift lower until production cutbacks are announced or the demand outlook improves significantly.
LME stocks trend higher, but cancelled warrants climb too
LME stocks have climbed sharply in recent weeks. The gain amounts to more than 100,000 tonnes since early December. Perhaps some of the increase was due to producers reducing stocks ahead of year end, but overall the rise in stocks does not bode well and makes it harder to justify the higher price rises of...
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