China to cancel 5% export tax rebate
UPDATE 3-Zinc jumps 6 percent, copper steady
reuters.com
By Julie Crust
LONDON, July 31 (Reuters) - Zinc futures jumped over 6 percent on Thursday after top producer China cancelled export rebates in a move that could curb the flow of Chinese zinc into the world market.
Copper and aluminium futures were steady as traders looked ahead to a raft of U.S. economic data later in the day.
Three month zinc MZN3 traded on the London Metal Exchange at $1,927 a tonne by 1043 GMT, up from Wednesday's close of $1,870. It eased from an earlier two-week peak of $1,984 after LME stocks increased by 3,000 tonnes to 157,325 tonnes, the highest level since September 2006.
"A mixture of positioning, techincals and now fundamentals leaves the zinc market poised for a nasty squeeze higher," John Reade, analyst at UBS, said in a research note.
"With the market apparently extremely short zinc, this could be a trigger for a sharp move higher to $2,000 a tonne or beyond," he said.
The Chinese tax rebate of five percent for super high-grade zinc, used as a galvanizing agent on steel, will come into effect from Aug 1. [ID:nHKG92342] |
