Saturday, October 17, 2015

LME Zinc may recover and average $2,275 a ton in 2016: Deutsche Bank

LME Zinc may recover and average $2,275 a ton in 2016: Deutsche Bank
Deutsche Bank's bull case on zinc had been severely dented over the past three months. 

A strong USD combined with Chinese demand fears has seen a build of shorts on the LME, and prices collapse by $800 a ton since the beginning of May.

Glencore’s bold step of closing a similar amount of capacity is likely to squeeze out short positions, and lead to a deficit market of c.500kt in 2016E. 

This would be the fifth year in a row of zinc deficits, and Deutsche Bank forecasts the zinc price to recover and average $2,275 a ton in 2016E.

However, zinc prices at London Metal Exchange settled down by 0.64% to $1805.50 a ton on Thursday, while inventories down by 1050 tons to 587200 tons.

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