Zinc inventories on the London Metal Exchange (LME) have dropped to their lowest in more than 30 years.

A decline in LME zinc inventories, which have fallen 91% in the last twelve months to 19,150 tonnes.

Research head at Amalgamated Metals Trading. “You’d assume if LME inventories were that low you’d have a massive backwardation.

Zinc inventories dropped to lowest in 3 Decade’s

When LME inventories are low and traders are rushing to get supply. LME spreads frequently spike into strong backwardations, where spot prices are higher than those on the futures market

Inventories have been increasing in China over previous few weeks. Especially on Shanghai Futures Exchange, where they have nearly doubled to 35,098 tonnes during the last 3 weeks.

The bank predicts that global zinc ratio would change from a shortfall of 320,000 tonnes in 2022 to an excess of 67,000 tons this year.