Im thinking Ganns head and shoulders is looking a tad more remote now and we should consider zinc to have been effectively RERATED for the foreseeable future unless the Chinese decide to start dumping large amounts of zinc into the LME stockpile.The funds have much more clout than the 40Kt that Shanghai has and from their(funds) selling as of late they have gone very "short" zinc.
LME-registered stocks of zinc fell by a net 19,150t,or 21.6%,over the course of May with the headline figure now recording fresh cycle lows with each passing day.
Draws have at times been less than exciting-we're right now in a period of very subdued activity-but inflow in May has been only light,confined to 2,025t at Rotterdam,1,000t at Singapore and 200t at Trieste.
Unless we see more metal arriving in the system in greater quatities,the downtrend seems set to continue AND EVEN ACCELERATE.Cancellations were again robust Thursday and the ratio of cancelled tonnage in the system has risen to 12.6%,which suggests accelerated "out" side activity in the coming days.
Meanwhile,stocks registered with the Shanghai Futures Exchange(SHFE) were little changed in the week to Thursday,registering a net build of 191t to 40,440t.
MI Comment:Slipping stocks make zinc "the value buy"(?)
Friday morning saw another 1,275t cancelled and prices picked up to 3,760 shortly after the LME's stock report,though as we signed off values were back to 3720,on a total turnover of 1,250 lots.With LME stocks at "extremely low" levels,one analyst suggested that among the LME complex,zinc was "the value buy atm".Technically however,Cliff Green Consultancy waited for a break of resistance at 3840,after which a test of the 3950/70 region would become readable,they suggested.
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