Shanghai zinc gains as Glencore maintenance plan fuels supply fears
Shanghai zinc prices firmed on Tuesday, hitting their highest levels in nearly three weeks, on global supply concerns after miner and commodity trader Glencore announced plans to put its zinc sulphide operations in Italy under maintenance.
The most-traded January zinc contract on the Shanghai Futures Exchange was up 3.5% at 23 710 yuan a tonne, as of 07:48 GMT. It touched its highest since November 4 of 23 980 yuan a tonne earlier in the session.
Three-month zinc on the London Metal Exchange edged 0.2% higher to $3 355.50 a tonne, having earlier hit a more than two-week high of $3 359.
Glencore said the zinc plant in Portovesme, which has a capacity of 100 000 tonnes a year, would be put on care and maintenance until there was "a meaningful change in power market prices".
"The driving momentum is mainly from the European market because there are some potential risks for cutbacks at smelters due to the energy issue," said CRU analyst Dina Yu in China.
However, the Chinese market fundamentals are not good, Yu said, adding supply was increasing with lower disruption from power restrictions while demand from housing and construction sectors had weakened.
The premium of LME cash zinc over the three-month contract rose to $52.80 a tonne, its highest since October 29, indicating tightening nearby supplies as LME inventories of the metal fell to 175 025 t, their lowest since July 2020.
"We see the net impact of high power prices as bullish for aluminium, and zinc, as it drives up marginal costs and may result in further output closures," Citi analysts said in a note.
Comments
Research Reports
Projects
Latest Multimedia
Showroom
Rooted in the hearts of South Africans, combining technology and a quest for perfection to bring you a battery of peerless standing. Willard...
VISIT SHOWROOM
Weir is a global leader in mining technology. We recognise that our planet’s future depends on the transition to renewable energy, and that...
VISIT SHOWROOM
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
