LONDON (Commodity Online): Improved risk appetite yesterday saw the metals rise with Lead particularly strong, up 3.3%, while Nickel was the only metal to close softer. Copper has held up remarkably well over the past few days despite a barrage of macroeconomic worries. Copper prices are up slightly on the week and are down the least on the month.
The spectre of labour-related copper mine disruptions still loom large with Escondida contract workers set to vote today on a proposal to hold a 24-hour strike at the mine according to Bloomberg. Copper mine disruptions have already been more than anticipated this year and unrest in Chile poses further downside risks to supply from the world’s largest copper miner.
The International Lead and Zinc Study Group (ILZG) data for July shows that both markets remained in surplus in June, though the size of the zinc surplus had shrunk sharply. The global refined Zinc surplus shrunk from 42Kt in May to 1.4Kt in June in line with our market balance forecast for a temporary tightening in supply-demand conditions in Q3 before moving back into surplus in Q4.
Refined output was slightly stronger than expected, rising by almost 5% y/y, while consumption was weaker than expected, rising by just over 3%.
Concentrate production growth pick up pace rising just over 4% y/y driven by growth in output from China, India and Mexico which offset declines in Canada and Peru. The global refined Lead market remained in surplus in June to the tune of 17.4Kt with refined output (up 6% y/y) growing faster than demand (up 4.5% y/y).
This is in line with our market balance of a 102Kt surplus in H1 turning into a deficit in H2. The ILZG data showed that global concentrate output continued to grow strongly, up over 11% y/y driven by China, India and Mexico.
