Zinc and copper driven up by supply fears before retreating on strong dollar
XLB•Zinc hits more than four-year high on supply worries
Zinc prices hit a more than four-year high on supply worries while copper touched a seven-month peak on Tuesday before retreating under pressure from a stronger dollar and a global bond selloff.
Benchmark three-month zinc CMZN3 on the London Metal Exchange was up 1.3% at $3,933 a metric ton by 1020 GMT after touching $3,990 for its highest since May 2022.
Stock markets tumbled on Tuesday and bond yields jumped on the back of renewed fighting in the Middle East. MKTS/GLOB
"The tight supply outlook is the main focus in the industrial metals," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
"There are concerns about rising yields and the potential increase in funding costs, but it just goes to show that commodities with a tight supply situation can weather the storm when there's some concern about the demand outlook."
The most-traded zinc contract on the Shanghai Futures Exchange SZNcv1 touched a peak of 27,165 yuan a ton for its highest since January.
