Total zinc inventory in London Metal Exchange warehouses has risen by 37% since the start of April to 100,075 tonnes as of April 23.
Market sources attribute the rise in stocks to producers shipping their stock into warehouses to wait out the storm that is Covid-19.
Demand for the galvanizing metal, like many other commodities, has fallen due to Covid-19 related lockdowns, leaving traders and producers needing to deliver units onto the London Metal Exchange, known as the physical market of last resort.
The LME is frequently known as the physical market of last resort because when there is no downstream demand and no profit to be made from selling material, stockholders deliver inventory in LME-registered warehouses for storage until demand picks up again.
Zinc is used mainly in galvanizing steel and is connected heavily to the auto industry,
which has slumped amid various virus lockdowns.
Few consumers are buying spot zinc cargoes...