Zinc prices rose almost 2.5% today, erasing all losses recorded in November and reaching their highest levels since mid-October. Investors are responding with increased buying after reports of the biggest surge in orders to withdraw metal stocks from the London Metal Exchange (LME) in nine years.
Zinc futures rose to their highest level since the double top pattern formed in October. Source: xStation
Zinc withdrawal orders from LME warehouses soared to 57,350 tonnes today, marking an increase of 47,800 tonnes in a single day. Reports from Bloomberg suggest that increased demand for zinc in Singapore is the main driver behind this sharp rise in inventory withdrawals.
At the same time, reduced availability of the metal in LME warehouses puts pressure on supply, meaning there is less zinc available to other buyers. This shortage led to a sharp increase in zinc prices, reversing the declines observed at the end of October.
Although zinc stocks in LME warehouses have rebounded in 2024, recent days have seen growing uncertainty among investors. LME data reveals that a single entity purchased more than half of available zinc stocks, adding further volatility to the market.
Orders to remove zinc from LME warehouses have reached their highest level in nine years. Source: Bloomberg Finance LP
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