Trafigura rattles zinc market with huge order for LME metal

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Trafigura Group has ordered thousands of tons of zinc out of London Metal Exchange warehouses, fueling a rally in prices, according to people familiar with the matter.

Trafigura — which runs several zinc smelters and is one of the world’s biggest traders and producers of the metal — was behind the orders, said the people, who asked not to be identified due to the commercially sensitive nature of the matter.While the orders are the biggest seen in the zinc market in years, physical traders like Trafigura routinely withdraw large volumes from LME warehouses for a variety of reasons.

The volume of zinc held in LME warehouses has rebounded sharply from critically low levels seen in early 2023, with a mountain of stock accumulating in Singapore during a downturn in demand for the steelmaking material. Much of that metal was delivered by Trafigura,Data from the exchange shows that a single entity had bought up more than half of the readily available stock in the LME’s warehousing network.

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