METALS-Zinc hits 4-year high and on track for biggest monthly jump since January

Aug. 28 (Reuters) - Zinc struck a four-year high near the $4,000 mark on Friday and was on course for its biggest monthly climb since January as available stocks on the London Metal Exchange shrank, renewing investor concerns over tightness.

Benchmark LME three-month zinc CMZN3 was up 1.2% at $3,929 a metric ton in official open outcry activity, after earlier touching $3,955, its highest since May 2022.

Zinc, used to galvanise steel, was poised for a 7.4% gain in August, which would mark its strongest month since the start of the year.

The LME is closed on Monday for a bank holiday in Britain.

LME stocks data showed 19,125 tons of fresh zinc warrant cancellations, or orders to remove metal from warehouses, mostly in Singapore. That reduced available zinc stocks MZNSTX-TOTAL to 75,600 tons, or around two days of global consumption.

"If inventories continue to flow out ... tight spot supply may continue to support zinc prices," broker Marex said in a note. "However, if high prices attract large quantities of metal back into LME warehouses, the rebound in inventories could quickly alleviate tensions."

The cash LME zinc contract was nearly $200 a ton higher than the three-month forward CMZN0-3, indicating near-term tightness.

In China, however, Shanghai Futures Exchange zinc SZNcv1 closed up only 0.1% on Friday, with stocks ZN-STX-SGH edging down from the previous week but still relatively high at 153,669 tons. Chinese zinc exports have in part eased fears of a shortage outside the country.

SHFE copper stocks CU-STX-SGH meanwhile plunged by 19.1% to 72,428 tons.

LME copper CMCU3, also supported by low inventories lately, gained 0.6% to $14,365 a ton, within striking distance of its all-time peak of $14,527.50. It was set for a ninth straight weekly gain and a monthly rise of 4.2%.

Traders are watching for clues on U.S. monetary policy from Federal Reserve Chairman Kevin Warsh, who will address economists at Jackson Hole on Friday.