Zinc: H1 forecasts raised, H2 on hold

Another 10-year high on stock fall, option-related buying, dollar weakness

Bullish sentiment has continued to carry zinc higher, with prices testing above $3,580 per tonne at the start of this week. Alongside broader risk-on sentiment and dollar weakness, option-related buying likely featured given the level of call options around the $3,500 strike. There has also been a pick-up in withdrawals from LME warehouses. Outflows increased to average 1,885 tonnes across the past two days, compared with an average of only 90 tpd so far in January. Based on the stronger pace of withdrawals, LME zinc stocks could be below 100,000 tonnes by early April which could make for an interesting set-up...