LONDON- Zinc prices slumped on Friday, retreating from the previous session’s 20-month high, as inventory inflows calmed worries about potential shortages.
Most industrial metals on the London Metal Exchange pared losses or went into positive territory in the European afternoon after the dollar index softened.
A weaker dollar makes commodities priced in the US currency less expensive for buyers using other currencies.
Earlier, they had been weighed down by the lack of robust stimulus measures in top metals consumer China and caution ahead of the US presidential election.
Three-month LME zinc slid 2.4 percent to $3,098 a metric ton 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 percent 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
The premium of cash LME zinc over the benchmark three-month contract jumped to $58 a ton on Wednesday, its highest since September 2022, but tumbled to $15 on Friday.
