Zinc retreated from 16-1/2 month highs on Tuesday as investors liquidated long positions after healthy gains and producers sold material at attractive prices.
Three-month zincon the London Metal Exchange shed 1.1 percent to $2,193 a tonne in official midday trading after touching a session high of $2,222, the strongest since Feb. 13, 2013.
Zinc, mainly used for galvanising steel, has rallied about 15 percent since late March on views that shortages would develop and support higher prices.
"I think we're seeing a bit of profit taking and also some producer activity," said analyst Robin Bhar at Societe Generale in London. "Zinc has been the one investors latched onto after the ILZSG numbers came in, but I'm a bit cautious."
International Lead and Zinc Study Group (ILZSG) said last month that the global zinc market was in a 107,000 tonne deficit in January to April.
"This talk of mine supply constraints and shortages, I think it's more of a longer-term story - the middle of next year onwards - so I wouldn't want to establish any position now," Bhar added.
Analyst Angela Bi of Macquarie in Shanghai agreed that zinc's rally looked overdone, given ample stockpiles of metal in China, where bonded stocks have grown by 100,000 tonnes to a record 250,000 tonnes.
COPPER STOCKS RISE
Copper also fell after an increase in LME stocks, following a price rise to its strongest levels in nearly four months.
Three-month LME copperedged down 0.29 percent to $6,995 a tonne in official rings after hitting its highest since March 7 at $7,028.50 a tonne.
LME copper stocksrose for the first time in about a month as metal arrived in Busan, Korea, raising concerns that this could be the start of an influx of shipments.
Analysts have warned that a probe into metals financing at China's Qingdao port could spur the flow of metal into more regulated LME warehouses.
"I'm wondering if these long anticipated shipments from China are now being unloaded and being put on warrant at Korean warehouses. It feeds some negative sentiment into the market," Bhar said.
Copper losses were modest as the market was supported by tight supply and signs of an improvement in China and Japan's factory sectors.
Manufacturing activity in Asia's industrial power houses China and Japan gained pace in June, fuelled mainly by improving demand at home, but a long-awaited bounce in exports remained slow in coming.
But data from Europe dampened sentiment, showing manufacturing growth in the euro zone eased slightly more than previously thought last month.
In other metals, aluminiumshed 1.1 percent in official rings to $1,870.50 a tonne, lead fell 0.5 percent to $2,162, nickel lost 0.6 percent to $18,925, while tin bucked the weaker trend, rising 0.13 percent to $22,575.
Source: Reuters
Three-month zinc
Zinc, mainly used for galvanising steel, has rallied about 15 percent since late March on views that shortages would develop and support higher prices.
"I think we're seeing a bit of profit taking and also some producer activity," said analyst Robin Bhar at Societe Generale in London. "Zinc has been the one investors latched onto after the ILZSG numbers came in, but I'm a bit cautious."
International Lead and Zinc Study Group (ILZSG) said last month that the global zinc market was in a 107,000 tonne deficit in January to April.
"This talk of mine supply constraints and shortages, I think it's more of a longer-term story - the middle of next year onwards - so I wouldn't want to establish any position now," Bhar added.
Analyst Angela Bi of Macquarie in Shanghai agreed that zinc's rally looked overdone, given ample stockpiles of metal in China, where bonded stocks have grown by 100,000 tonnes to a record 250,000 tonnes.
COPPER STOCKS RISE
Copper also fell after an increase in LME stocks, following a price rise to its strongest levels in nearly four months.
Three-month LME copper
LME copper stocks
Analysts have warned that a probe into metals financing at China's Qingdao port could spur the flow of metal into more regulated LME warehouses.
"I'm wondering if these long anticipated shipments from China are now being unloaded and being put on warrant at Korean warehouses. It feeds some negative sentiment into the market," Bhar said.
Copper losses were modest as the market was supported by tight supply and signs of an improvement in China and Japan's factory sectors.
Manufacturing activity in Asia's industrial power houses China and Japan gained pace in June, fuelled mainly by improving demand at home, but a long-awaited bounce in exports remained slow in coming.
But data from Europe dampened sentiment, showing manufacturing growth in the euro zone eased slightly more than previously thought last month.
In other metals, aluminium
