Zinc prices extended gains for a sixth straight session on Wednesday, revisiting their highest levels in more than four years on supple worries and speculative buying.
Benchmark three-month zinc on the London Metal Exchange was up 0.4% at $3,907 a metric ton by 0945 GMT, its strongest since June 2022.
Zinc, mainly used to galvanise steel, has been hit by regional disparity, with inventories eroding in warehouses registered with the LME while piling up in China.
The localised shortages have sent the premium of cash LME zinc over the three-month futures to $132 a ton, up from zero in early July and the highest since last December.
Speculative buying has underpinned the strong zinc prices, which have gained 25% this year, but some are wary about how long this will continue.
"We believe that zinc's upside remains vulnerable to a positioning unwind once momentum stalls," broker Sucden Financial said in a note.
Three-month LME copper, which has also been hit by falling inventories and supply worries, was little changed at $14,355 a ton, having earlier touched its highest in six months at $14,437.
The most-traded copper contract on the Shanghai Futures Exchange rose 0.6% to 108,750 yuan ($16,182.55) a ton.
The metal, nicknamed Dr Copper for its use as a barometer of wider economic health, was restrained as markets awaited U.S. inflation data due at 1230 GMT.
The uncertainty offset price support from waning LME inventories as non-traditional copper participants including hedge funds and other speculative investors trade on inventory data showing falling warehouse stocks.
"There are a lot of non-traditional sources trading copper, and an awful amount of fast money moving on data releases," said David Wilson, head of metals strategy at BNP Paribas.
Among other metals, aluminium dipped 0.1% to $3,236 a ton, lead lost 0.2% to $1,902, nickel slipped 0.3% to $16,990 and tin shed 0.2% to $55,750.
