Zinc Hovers at 5-Month High
In September, zinc futures surged past $2,897 per tonne, marking a five-month peak, driven by a weakened dollar and production constraints in China. Global industrial metal exchanges saw an upswing after the Federal Reserve signaled the possibility of an interest rate cut in its forthcoming meeting, enhancing credit environments in key economies and exerting downward pressure on the dollar. This offered support to dollar-denominated commodities. Simultaneously, speculation grew that Chinese production might shrink as Beijing committed to curtailing capacity in metal markets to counteract deflationary trends in the country. Earlier in the year, Teck Resources' Red Dog mine reported a 20% decline in its first-quarter output, while Nyrstar announced a 25% reduction for the year. These factors align with the reduction in inventories at London Metal Exchange warehouses, which have decreased by 130,000 tonnes since the year's start, reaching 42,000 tonnes.
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