Zinc prices hit their highest level in 10 years on Wednesday (August 16), breaking the $3,000-per-tonne mark to reach $3,111. Supply concerns, a strong demand outlook from China and a decline in warehouse inventories supported the rally.

“Improving demand sentiment has been fueled by a resurgence in Chinese economic growth. However, we continue to look to supply as the primary driver underpinning increasing zinc prices,” Cormark Securities analyst Stefan Ioannou said via email.

LME warehouse stocks are down more than 40 percent year-to-date, while SHME inventories are down 54 percent since the beginning of the year. “The lack of a sudden appearance of ‘non visible’ inventory onto the LME over the last 10 months further suggests supply tightness,” Ioannou added.

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