FX.co ★ Zinc Rises to 11-Month High

Zinc futures in the UK surged to $3,100 per tonne in November, marking their highest level in over eleven months, driven by clear signs of limited refined metal supply. According to data from the International Lead and Zinc Study Group, there has been a decline of more than 2% in refined zinc production this year, despite a 6.3% increase in mined output. This trend aligns with production constraints faced by smelters in countries such as Kazakhstan and Japan, exacerbated by the closure of Japan's significant Toho Zinc Annaka facility. Additionally, zinc treatment charges escalated to $87.5 per tonne, a stark contrast to their negative position at the end of the previous year, as per Shanghai Metals Market surveys. Consequently, inventories at the London Metal Exchange (LME) plummeted to 35,000 tonnes, a notable decrease from 230,500 tonnes at the year's outset. This figure represents less than a single day's worth of global demand, leading to the steepest cash-to-3-month contract spread observed since at least 1997.