LONDON — Zinc prices surged to their
strongest in two months on Tuesday after production was
suspended at a Dutch smelter amid high power prices, stoking
fears of shortages.
Benchmark zinc on the London Metal Exchange jumped
6.6% to $3,797.50 a tonne by 1030 GMT, the highest since June 9.
Nyrstar said it would put its zinc smelting
operations at Budel in the Netherlands on care and maintenance
from Sept. 1.
Nyrstar had already cut output by up to 50% at its three
European zinc smelters while Glencore warned this month
that “the current energy supply and price environment poses a
“That theme is ongoing due to tightness in the electricity
and power market in Europe,” said Xiao Fu, head of commodity
market strategy at Bank of China International.
“Market inventories have fallen to very low levels and we
would expect stocks to continue to fall in Europe.”
Low water levels on the Rhine were an added concern, she
Dutch gas for September hit the highest levels
since March this week, boosted by hot weather in Europe.
Citi upgraded its zinc price forecast for the next three
months on Monday to $3,200 a tonne from $2,800, saying it
expected concern about an economic downturn would weigh on all
base metals prices, but zinc would outperform.
“We project greater forecast cuts to European zinc smelter
output as winter power shortages play out,” Citi said in a note.
LME aluminum , which is also an energy-intensive
metal, gained 2.1% to $2,439 a tonne.
Aluminum producer Henan Zhongfu Industrial said
it was suspending production this week as China’s Sichuan
province rationed industrial electricity consumption in its most
severe heat wave in 60 years.
In other metals, LME copper edged up 0.2% to $7,992 a tonne,
nickel climbed 1.5% to $22,335, lead added 0.2%
to $2,182 and tin slipped 0.5% to $24,605.
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($1 = 6.7953 yuan)
(Reporting by Eric Onstad; Editing by Robert Birsel)