Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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May 2019 | Base Metals

Zinc: Price forecast downgrade may be required

The LME cash price has averaged $2,874 per tonne so far in Q2, which is more in line with our low case forecast scenario of $2,800 per tonne. We still maintain that the fundamentals are set to retighten across Q2-Q3, and a breakthrough in trade negotiations could trigger a strong price rebound. If this is not forthcoming soon, however, our forecast scenarios will need to be lowered.

Trade uncertainties weighing heavier on prices
Zinc prices are testing support below $2,600 per tonne at the start of this week after dropping by 4.6% across the past week. Resurgent uncertainty surrounding current US-China trade negotiations have triggered broad-based pressure across risk markets.

Tight spreads attracting more stocks to the LME

LME zinc stocks have continued to trend higher as tight spreads attract previous off-market inventory back on to warrant. A further 18,100 tonnes of zinc was delivered into LME warehouses across the past week, bringing the year-to-date total to 65,750 tonnes. At the same time, outflows remain modest; they have...


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