BEIJING/HANOI- Shanghai zinc prices hit a two-month high on Wednesday following a rally in London the prior day, prompted by news of European smelter Nyrstar’s shutdown.
The most-traded September zinc contract on the Shanghai Futures Exchange rose 2.8 percent to 25,485 yuan ($3,756.30) a ton, having hit its highest since June 16 earlier in the session of 25,935 yuan a ton.
Nyrstar said on Tuesday it would put its zinc smelting operations at Budel in the Netherlands on care and maintenance from Sept. 1.
This has stoked further supply fears as the Belgian company had already cut output by up to 50 percent at its three European zinc smelters, while Glencore said this month “the current energy supply and price environment poses a significant threat”.
Three-month zinc on London Metal Exchange (LME) jumped by as much as 7.2 percent to a two-month high at $3,819 a ton but later gave up most of the gain.
Meanwhile, the latest power controls in China, the world’s top metal producer, have also sparked concerns over metals supply.
The southwestern Sichuan province ordered industrial users to suspend production from Aug. 15 until Aug. 20 to prioritize residential power supply amid heatwave, disrupting metal production including lithium, aluminum and zinc. – Reuters
