April 12, 2018 / 7:23 AM / 5 months ago

METALS-London zinc slides to 4-mth low on slow pick-up in China steel demand

 (Adds analyst comment, details; updates prices)
    By Melanie Burton
    MELBOURNE, April 12 (Reuters) - London zinc fell to a
four-month low on Thursday, tracking the prices of other steel
materials as construction demand in China got off to a slow
start in the usually strong second quarter. 
    Markets came under pressure on Thursday as the threat of
imminent U.S. military action in Syria rattled investors and
sent oil prices higher on concerns about potential disruptions
to supply and distribution.
   "The metals seem to have slipped back into following the
global equity markets and thus prices are lower today as Asian
stocks lose ground," said Kingdom Futures in a report.
   "The markets will certainly be more nervous than usual as
people watch out for the U.S. response to Syria."
    
    FUNDAMENTALS
    * London Metal Exchange zinc slid 2.7 percent to
$3,150 a tonne by 0637 GMT, having earlier touched a low of
$3,122.50, its weakest since Dec. 12. Prices crashed through
support at the 200-day moving average of $3,172 a tonne,
triggering a rush in sales from funds, a trader said. 
    * SRB SALES?: Industry sources said that the drop in prices
was fuelled by talk that China's State Reserve Bureau had been
selling zinc stocks, although several traders dismissed the talk
as having been around in the market for several weeks. 
    "It's supposed to be 50,000 tonnes - that's not really
enough to impact the market," one trader said. The SRB did not
immediately reply to a faxed request for comment. 
    * LME copper fell 1.2 percent to $6,863 a tonne,
reflecting a sour tone across metals amid broad risk-off
sentiment in the markets. Shanghai Futures Exchange copper
 fell 1.4 percent to 50,400 yuan ($8,030) a tonne. 
    * STEEL DEMAND: Iron ore futures in China have been falling,
with investors worried about slipping steel margins this year
and leaner demand in the world's top consumer. A seasonal pickup
in China's construction activity that usually comes in April and
May has been off to a slow start, traders said. 
    * ZINC: Longer term, zinc prices are expected to remain
buoyant after hitting their highest in a decade because of years
of underinvestment, the founder and chairman of Vedanta
Resources said on Wednesday. 
    * CHINA POLLUTION: The Chinese city of Xuzhou is carrying
out environmental inspections targeting air pollution emissions
at industrial plants, construction sites and in the transport
sector that are expected to last for as long as six months. 
    * CME Group has also revoked approved status for
registration of Russian firm Rusal's metal for
delivery against its aluminium futures contracts, according to a
notice on its website. 
    * RUSAL: Trader Glencore, a Rusal shareholder and
customer, will declare force majeure on some aluminium supply, a
source familiar with the matter said.
    * COMING UP: Euro zone industrial production Feb at 0900 GMT
    PRICES    
                                       0642 GMT          
 Three month LME copper                            6860.5
 Most active ShFE copper                            50400
 Three month LME aluminium                         2229.5
 Most active ShFE aluminium                         14310
 Three month LME zinc                                3152
 Most active ShFE zinc                              23635
 Three month LME lead                              2365.5
 Most active ShFE lead                              18515
 Three month LME nickel                             13760
 Most active ShFE nickel                           102040
 Three month LME tin                                20900
 Most active ShFE tin                              142730
                                                         
                                                         
 LME/SHFE COPPER                 LMESHFCUc3        327.59
 LME/SHFE ALUMINIUM              LMESHFALc3      -1938.84
 LME/SHFE ZINC                   LMESHFZNc3         109.8
 LME/SHFE LEAD                   LMESHFPBc3        136.56
 LME/SHFE NICKEL                 LMESHFNIc3       -395.09
 
($1 = 6.2762 Chinese yuan)

    
 (Reporting by Melanie Burton; Editing by Tom Hogue and Biju
Dwarakanath)
  
 
 
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