Zinc prices have recently witnessed a sudden rise amid rising demand from Singapore

Zinc prices continued their upward momentum, extending gains into a third straight session as withdrawals from London Metal Exchange (LME) warehouses surged to unprecedented levels in recent years. Withdrawal orders soared by over 49,000 tons in just two days, bringing the total to 106,775 tons, a figure not seen since October 2017.

A large number of orders have been placed to withdraw zinc specifically from LME warehouses in Singapore. As a result, the amount of zinc left available for other buyers has decreased. This reduction in supply creates additional pressure on the market, as there is less metal available to meet overall demand. This scarcity influences the zinc futures market, where traders rely on the availability of physical metal to set prices and fulfill contracts. In essence, the surge in demand for zinc from Singapore's stockpiles is tightening the overall supply and making it harder for other buyers to access the metal, which can drive up prices in the futures market.

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Earlier this year, zinc inventories at LME warehouses, particularly in Singapore, saw a sharp recovery from historically low levels due to reduced demand for the metal, commonly used in steel production. However, the market is now grappling with renewed supply anxieties. Reports indicate that a single market participant has acquired more than half of the readily available zinc within the LME system, intensifying concerns over accessibility. Currently, accessible inventories have dropped to 154,125 tons, marking the lowest point since November 2023 and underscoring the growing strain on supply chains.

This week, zinc prices have climbed nearly 5%, reaching $3,111 per ton on the LME—the highest level in over a month. Year-to-date, the metal has gained 17%, fueled by a combination of supply disruptions and robust market demand. Persistent challenges in mining operations have further tightened availability, creating an environment where pricing strength is expected to continue in the near term.