Zinc climbs as Chinese steel prices surge to new peaks

LONDON: Zinc prices clawed higher on Friday, getting a boost from another surge in Chinese steel prices and from investors who are still bullish about shortages of the metal developing.
Chinese rebar steel futures jumped 4 percent to their highest in four years on Friday, reflecting firm demand for the building material in the world's top consumer.
Zinc is often influenced by steel prices since its biggest use is for galvanising steel.
Some investors have become wary about zinc's bull story after Chinese output unexpectedly rose 17 percent month-on-month in June despite last year's closures and suspensions in zinc mines, said analyst Vivienne Lloyd at Macquarie.
"That's made people wonder whether the expectation of zinc cuts has been too optimistic and in fact the Chinese smelters are able to continue to produce at stronger levels than expected," she said.
"We tend to think that one month's print isn't enough to ruin the bull story, but it has caught our attention ... I think people today are looking at whether it has been carried down too far and are thinking about entry points."
ZINC - Benchmark zinc on the London Metal Exchange was the biggest mover, trading 0.7 percent higher in official trading at $2,812 a tonne after slipping 0.3 percent in the previous session.
ZINC STOCKS - Zinc inventories in LME registered warehouses are down 38 percent this year, data shows. MZNSTX-TOTAL
U.S. DATA - Investors were eyeing monthly U.S. non-farm payrolls data due at 1230 GMT on Friday, which is expected to show an increase of 183,000 jobs last month.
ALUMINIUM - LME aluminium, untraded in official rings, was bid down 0.4 percent at $1,909 a tonne.
"The market is trading towards the bottom end of its range and consumer buying has been evident into this area. The technical long-term up trend line is at $1,899 from the September 2016 low," Alastair Munro at broker Marex Spectron said in a note.
ALUMINIUM BEAR: One analyst was not convinced that aluminium prices would see a further benefit from a crackdown by Chinese authorities on illegal or polluting aluminium smelters.
"While governmental interference poses the biggest upside risk given the world's reliance on Chinese exports, we believe this is to a large extent already reflected in today's prices," Carsten Menke at Julius Baer said in a note.
"We remain of the opinion that oversupply should persist, pushing prices towards our 3- and 12-month targets of $1,750 per tonne."
PRICES: Three-month LME copper was bid up 0.1 percent at $6,356 a tonne, lead was bid down 0.1 percent at $2,364, nickel was bid down 0.1 percent at $10,375 and tin was bid up 0.2 percent at $20,700.