Zinc hovers at four-year high on regional tightness

Three-month LME copper CMCU3, which has also been hit by falling inventories and supply worries, fell 0.8% to $14,240 a ton, having earlier touched its highest in six months at $14,437.

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 rose 0.6% to 108,750 yuan ($16,182.55) a ton.

Among other metals, aluminium CMAL3 eased 0.6% to $3,217.50 a ton, nickel CMNI3 fell 0.9% to $16,885 and tin CMSN3 dropped 1.6% to $54,935 while lead CMPB3 added 0.2% to $1,908.

($1 = 6.7202 Chinese yuan renminbi)

Zinc prices erased gains after touching their highest levels in more than four years on Wednesday, as U.S. inflation data came in slightly stronger than expected, boosting the case for interest rate hikes.

The bluish-white metal had hit intraday highs on supply worries and speculative buying, but increased prospects of rate hikes firmed up the dollar, and with it dragged most base metals into the red.

A stronger dollar makes commodities priced in the U.S. currency more expensive for buyers using other currencies.

Benchmark three-month zinc CMZN3 on the London Metal Exchange was down 0.3% at $3,879 a metric ton by 1645 GMT, after rising as much as 1.5% earlier to its strongest since June 2022 at $3,949.50 following five straight sessions of gains.

Zinc, mainly used to galvanise steel, has been hit by regional disparity, with inventories eroding in warehouses registered with the LME while piling up in China.

The localised shortages have sent the premium of cash LME zinc over the three-month futures CMZN0-3 to $132 a ton, up from zero in early July and the highest since last December.