By Li Xiaowei
Dec. 23 (Bloomberg) -- Zinc futures rose to the highest in more than three weeks on speculation that Chinese government may buy the metal soon to boost strategic reserves and to help producers amid economic slowdown.
The State Reserve Bureau may buy zinc from producers after the New Year holiday ends Jan. 4, Sherry Zhu, an analyst at CBI China Co., said without providing details. China is the largest producer and consumer of the metal used to galvanize steel.
China reiterated last week it would increase reserves of “important” raw materials at a conference by the Ministry of Industry and Information Technology. Officials from the state- controlled SRB, which holds reserves of commodities to regulate supply, were not immediately available for comment.
“Zinc is bolstered by a tightness in domestic ore supply, which has narrowed because of low prices and chilly winter,” said Wang Zhouyi, an analyst at China International Futures Co.
Zinc for March delivery rose as much as 0.8 percent to 9,780 yuan ($1,427) a ton. It jumped the daily limit yesterday to 9,785 yuan, the most since Dec. 27.
The metal dropped 1.3 percent to $1,165 on the London Metal Exchange at 10:38 a.m. Shanghai time, bring this year’s plunge to 51 percent.
Among other LME-traded metals, copper rose 0.4 percent to $2,970 a ton and aluminum slid 0.2 percent to $1,555.
To contact the reporter for this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net
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