Zinc claws higher as stocks diminish

LONDON, March 20 (Reuters) – Zinc and nickel prices gained on Wednesday as inventories in London Metal Exchange warehouses hit fresh lows, but other industrial metals dipped on uncertainty about global demand. Low inventories of many metals in LME-registered warehouses are helping to bolster prices despite weak economic data from top metals consumer China, said Ross Strachan, senior commodities economist at Capital Economics in London. “The exchange stocks being at very low levels are understandably keeping many market participants on edge about the outlook when there has been speculation that a (U.S.-China) trade deal is near,” he said. “We’re still expecting very sluggish demand growth across the metals and we think that will be a major drag on prices,” he said. “In fact you could see exchange stocks rise significantly later in the year.” Prices may also be getting some support from investors betting on a dovish statement by the U.S. Federal Reserve later on Wednesday, some analysts said. Benchmark zinc was the biggest LME gainer, rising 0.9 percent to trade at $2,844 a tonne in official open outcry activity, while nickel was untraded in rings and was bid up 0.5 percent at $13,250. * ZINC/NICKEL STOCKS: LME zinc inventories , down 55 percent this year, touched their lowest since October 2007, while LME nickel stocks fell to the weakest since June 2013, LME data showed on Wednesday. Inventories in China, however, are more plentiful. * AMBATOVY: Nickel also got support after Japanese trading house Sumitomo Corp said on Wednesday its Ambatovy nickel plant in Madagascar had been forced to shut for about two weeks in early February and may miss its revised annual production target. * NORSK HYDRO: LME aluminium hit a fresh three-month peak of $1,951.50 a tonne, but traded down 0.1 percent to $1,944 a tonne in official rings after major producer Norsk Hydro said it had made some progress in restoring operations after it was hit by a ransomware cyber attack. However, the company was not yet back to normal, it said. * ALUMINIUM OUTPUT: Global primary aluminium output fell to 4.92 million tonnes in February from a revised 5.411 million tonnes in January, data showed on Wednesday. * TRADE: U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin plan to travel to China next week for trade talks with Chinese Vice Premier Liu He, a U.S. official said on Tuesday. * PRICES: LME copper added 0.1 percent to $6,467 a tonne in official trading while lead fell 0.2 percent to $2,035 and tin dipped 0.1 percent to $21,300.