Zinc Surges to 5-Year High as Metals Gain on China Factory Gauge
Bloomberg News
November 1, 2016 — 2:47 AM CET Updated on November 1, 2016 — 5:59 AM CET
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Zinc surged to a five-year high, leading most industrial metals upward, after data on China’s manufacturing sector burnished the case for bullish sentiment on demand.
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The metal used to galvanize steel rose 1.1 percent on the London Metal Exchange to $2,485 a ton, its highest since August 2011, before trading at $2,474 a ton by 12:59 p.m. in Shanghai. China’s official factory gauge in October rose to the highest since July 2014, underscoring the impact of stimulus measures that have pushed up commodities prices this year. All metals except aluminum rose in London.
“The PMI was obviously better than expected and can only be a positive for people’s outlook for demand across the metals,” said Ric Spooner, a chief market strategist at CMC Markets Asia Pacific Pty, said by phone from Sydney. “Demand has held up a lot of better than people anticipated six-or-nine months ago. At some point we will see the long-awaited
downturn, but it’s not happening yet.”
Zinc’s 54-percent gain this year makes it the LME’s top performer, as dwindling mine supply and resurgent demand fuel an emerging shortage. Zinc, used to coat flat steel products used in applications like auto bodies, is benefiting from rebound in China’s steel sector. The country’s steel industry PMI rose to 50.7 in October, its highest since May.
On the Shanghai Futures Exchange, zinc rose 3.6 percent.