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Zinc stockpiles in London Metal Exchange warehouses gained this week to hit their highest levels since 1995.
Stockpiles rose 3.9 percent to 1.02 million metric tons, the first time they have breached a million tons in 17 years, according to LME data.
Zinc supply is expected to outpace demand for the rest of 2012, which would be the sixth annual surplus in a row, according to a July 18 report by Frankfurt-based Commerzbank AG.
Zinc for three-month delivery slid 1 percent this week to $1,855 a ton by 1:01 p.m. on the LME.
Copper stockpiles in LME warehouses also rose this week, the first such gain since June 29.
Stockpiles rose 0.6 percent to 253,225 tons this week, according to LME data. Warehouses in the Netherlands saw most of the gains, adding 1,650 tons. Warehouses in Asia saw stockpiles slip Thursday and Friday after reaching the highest level since October on July 18, daily exchange figures show.
Higher Asian stockpiles could indicate weak Chinese demand, Nic Brown, head of research at Natixis Commodity Markets Ltd. in London, said by e-mail today.
Copper futures on the Shanghai Futures Exchange have seen the forward price rise above the spot price, known as contango, Brown said, adding this might also reflect weak demand.
“On top of rising stocks at Asian LME warehouses, that doesn’t look good,” Brown said.
Copper for three-month delivery slid 1.1 percent this week to $7,618 a ton on the LME.
Lead stockpiles in LME warehouses fell over the week by 1.8 percent to 338,325 tons. Nickel and aluminum stockpiles rose by 4.6 percent and 0.6 percent respectively.
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