Zinc: Short-term risks to the upside

LME spreads tighten...
The LME zinc forward curve has tightened recently with the cash/three-month backwardation flaring out to around $50 per tonne on Monday September 30, compared with $7 per tonne on September 20. While tighter spreads and the modest 0.7% decline in open interest across the week suggest an element of short covering, they also reflect falling availability; on-warrant stocks dipped to a record low of 38,875 tonnes last week.

...which risks attracting more metal on to LME warrant

So far the tighter spreads have only prompted a modest increase in inflows. A total of 14,425 tonnes was delivered on-warrant during September, compared with...