Analysts at ANZ explained the recent price action in metals.
"Base metals were broadly higher, with zinc leading the gains. The International Lead and Zinc Study Group (ILZSG) said the zinc market was in 92,400 tonne deficit in April. This followed on from data showing Chinese zinc production continues to fall. According to NBS data, China’s refined zinc production fell 9.9% y/y to 481kt in May. Year to date production (Jan-May) is now down 1.7% y/y. As a consequence, inventories held on exchanges are now at their lowest level since 2009.
Iron ore prices also inched higher after positive economic data boosted sentiment in the steel and iron ore markets. Futures markets in China were also strong, as a rise in consumer sentiment and manufacturing activity helped ease investors’ concerns about future demand. Spot iron ore were further supported by data showing port inventories in China fell. SteelHome data showed stockpiles fell 0.8% to 139mt."
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