METALS-Zinc hits three-week low on weak steel demand, strong dollar

March 27 (Reuters) - Zinc prices slid to hit their lowest level in more than three weeks on Wednesday as a firm dollar and weak steel demand weighed on the market.

Three-month zinc on the London Metal Exchange (LME) CMZN3was down 0.4% at $2,432 per metric ton by 0711 GMT, having fallen to a low of $2,415 earlier in the session, the weakest since March 4.
 

The most-traded May zinc contract on the Shanghai Futures Exchange (SHFE) SZNcv1closed down 1.7% at 20,795 yuan ($2,876.77) a ton. Earlier in the session, it lost as much as 2% to 20,725 yuan, the lowest since March 6.

Zinc inventories in LME and SHFE warehouses have been rising, pushing the discount of the LME cash zinc contract to the three-month contract to $50.83 a ton on Tuesday, the biggest since November 1991.

In top consumer China, a lack of sufficient capital has slowed the construction of infrastructure and property projects in the first quarter of 2024, reducing demand for zinc.

"The absence of strong policy signals from Beijing fuelled uncertainty over construction activity. Zinc is the base metal most impacted by weak steel demand," said ANZ analysts in a note.