LME Metals Stock Keeps Historical Low

Metals inventory of London Metal Exchange keeps decreasing. Especially, the zinc inventory decreased to a third level from the beginning of the year under very tight supply of ingot. The lead inventory also halved from June. The lower stock lifts the price of metals. The historical low level of copper inventory, which keeps just more than 100,000 tonnes in 2006, also supports the higher price. LME zinc stock was 133,325 tonnes on Wednesday compared with 393,300 tonnes at the beginning of the year. The supply is very tight when the demand increases in world largest producing country of China along with strong demand for steel and delayed development of new sources. World zinc supply will be 340,000 tonnes short for the demand in 2006, according to International Lead and Zinc Study Group. The group expects the shortage will decrease to 154,000 tonnes in 2007. LME zinc stock could decrease to less than 100,000 tonnes toward the end of 2006. LME lead stock decreased by 60% to 47,950 tonnes, which was the lowest level since January, on Wednesday from recent peak in June. LME copper stock is also historical low level. The stock recovered 100,000 tonnes in early 2006 from bottom of 25,000 tonnes in July 2005. However, the stock is 113,900 tonnes after the level decreased to less than 100,000 tonnes in July.