Analysts at ANZ note that the base metals sector ended a volatile week on a high, as inventories underpinned a broadly positive fundamental picture despite concerns about Chinese growth.
“Prices took a hit earlier in the week after the release of economic data showed Chinese GDP growth had fallen to its lowest level since the financial crisis in 2009. However, China’s senior officials moved to shore up confidence in the economy with verbal support, including some specific measures such as using policy tools to boost banks credit expansion. However falling inventory of metals such as zinc and copper shows the impact of commodities has been relatively small.”
“Zinc inventories on the LME fell 10% last week and are now at their lowest level since March this year. While copper stockpiles are down 60% since April. A weaker USD also helped support investor sentiment.”