LONDON (Reuters) - The discount on zinc for near-term delivery versus the three-month contract on the London Metal Exchange (LME) has reached its highest since March 2021, indicating plentiful immediate supply.
The discount, or contango, for cash zinc against the three-month contract, reached $24.50 per metric ton at Monday's market close, its deepest since March 2021.
The discount was last at $26.00 on Tuesday, compared to a premium, or backwardation, of $36.50 on Aug. 9 when stocks in the LME system were low.
Zinc inventories in LME-approved warehouses by the end of August had jumped to 153,575 metric tons, their highest since February, 2022, from 93,525 in mid-August. They have since fallen to 138,400 tons, LME daily data showed.
Used for galvanising steel, stocks of zinc in warehouses monitored by the Shanghai Futures Exchange have shown two-fold growth so far this year to 46,579 tons.
The LME benchmark three-month zinc contract was down 0.4% at $2,500 per metric ton on Tuesday.