Zinc prices continue to rally and climbed to their highest in about a decade Monday as traders build on their positions following the International Lead and Zinc Study Group’s report that the market will fall into a deficit this year.

The ILZSG said the zinc market registered a deficit of 203,000 tons in the first half of the year and that total stocks at the end of June stood at 1.16 million tons, down from 1.355 million tons at the end of March. This puts the zinc market on pace to end the full-year in a deficit of 412,000 tons, which is what analysts polled by Reuters predicted in a survey.

The ILZSG noted that total refined zinc stocks, including those held by consumers, producers and in exchange warehouses, fell to near 1.16 million tons at the end of June from above 1.35 million tons at the end of March.

Zinc traded in the range of $3125-$3180 on Monday. Support was at $2800 and resistance at $3200. Zinc prices have been meeting congestion at $2900, therefore a move above this price line has been met with technical rallies.

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