Zinc slides as inventory arrivals ease supply fears
Updates prices at 1615 GMT
By Eric Onstad
LONDON, Oct 25 (Reuters) -Zinc prices slumped on Friday, retreating from the previous session's 20-month high, as inventory inflows calmed worries about potential shortages.
Most industrial metals on the London Metal Exchange pared losses or went into positive territory in the European afternoon after the dollar index =USD softened.
A weaker dollar makes commodities priced in the U.S. currency less expensive for buyers using other currencies.
Earlier, they had been weighed down by the lack of robust stimulus measures in top metals consumer China and caution ahead of the U.S. presidential election.
Three-month LME zinc CMZN3 slid 2.4% to $3,098 a metric ton by 1615 GMT, after touching its highest since early February 2023 on Thursday.
"There have been a lot of shenanigans in the zinc market this week and some of that is deflating, so that is helping to drag down the rest of the market," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
One party had taken control of up to 79% of available zinc stocks in LME warehouses, creating concern about short-term availability of metal, but that dissipated after large inflows.
LME data showed net arrivals of 10,275 tons of zinc into Singapore storage facilities over the past two days, raising total stocks to 242,425 tons MZNSTX-TOTAL.
The premium of cash LME zinc over the benchmark three-month contract CMZN0-3 jumped to $58 a ton on Wednesday, its highest since September 2022, but tumbled to $15 on Friday.
Among other metals, LME aluminium CMAL3 rose 0.9% to $2,674.50 a ton after touching a multi-month high in the previous session, while LME copper CMCU3 gained 0.8% to $9,585 and U.S. Comex copper futures HGc2 dipped 0.2% to $4.31 a lb.
LME nickel CMNI3 eased 1% to $16,125 a ton, lead CMPB3 fell 1.6% to $2,041, while tin CMSN3 rose 0.7% to $31,360.
"Risk appetite is on the low side and positions are being kept relatively small because the U.S. election is too close to call and the impact could have a binary outcome," Hansen said, adding that a victory for Donald Trump could bring tariff threats for China.
Reporting by Eric Onstad; Editing by Shreya Biswas
Additional reporting by Mai Nguyen in Hanoi
Editing by David Goodman and Louise Heavens
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