Zinc Hovers at 5-Month High

Zinc futures climbed above $2,8970 per tonne in September, the highest in five months amid a softer dollar and capacity constraints in China. Industrial metals rose in global exchanges after the Fed paved the way for a rate cut in its upcoming September meeting, improving credit conditions in major economies and weakening the dollar, supporting commodities priced in the greenback. This coincided with bets that output in China could decline as Beijing pledged to reduce capacity in metal markets to combat the country's deflationary momentum. Earlier in the year, Teck Resources' Red Dog mine posted a 20% drop in Q1 output, while Nyrstar announced a 25% annual cut. The developments were consistent with lower inventories in LME warehouses, which dropped by 130,000 tonnes since the start of the year to 42,000 tonnes.