Aug. 18 (Bloomberg) -- Zinc advanced for the first time in four days as investors viewed the recent price drop to a five- week low as excessive amid forecasts of a supply shortfall.
The metal for delivery in three months on the London Metal Exchange rose as much as 0.6 percent to $2,286 a metric ton and was at $2,278.75 at 3:00 p.m. in Hong Kong. The contract closed at $2,272 on Aug. 15, the lowest since July 10. Zinc fell 1 percent last week in the third weekly decline.
Zinc has technical support along its 50-day moving average after trading below that level on Aug. 15, according to Kazuhiko Saito, an analyst at Fujitomi Co., a commodities broker in Tokyo. Buy orders tend to be clustered around chart-support levels. Global demand will exceed supply by 58,000 tons this year and by 154,000 tons in 2015, Goldman Sachs Group Inc. said in a report July 23.
“Zinc would be one of the best performers this year on a looming global deficit,” Saito said. Investors are awaiting U.S. inflation data tomorrow and a private gauge of China’s preliminary manufacturing growth on Aug. 21, he said.
Stockpiles tracked by the Shanghai Futures Exchange fell 3.4 percent to 192,697 tons last week, the lowest since December 2009 and the fourth weekly decline, bourse data showed. China is the biggest user of industrial metals.
Copper in London was little changed at $6,862.50 a ton. In New York, the metal for December delivery was little changed at $3.12 a pound. The October contract on the Shanghai exchange advanced 0.1 percent to close at 48,970 yuan ($7,969) a ton.
On the LME, aluminum, lead, nickel and tin fell.
--With assistance from Alex Davis in Hong Kong.