LONDON: Zinc prices surged to their highest in almost four years on Thursday after another incident at a smelter exacerbated supply fears, while copper was poised to end a run of eight straight daily gains but held above the USD14,000 mark.
Benchmark three-month zinc on the London Metal Exchange was up 2.5percent at USD3,615 per metric ton in official open outcry activity. The metal used to galvanise steel touched USD3,633.50 earlier, the highest since August 2022.
Nexa Resources on Wednesday said operations at its 344,400 ton per year Cajamarquilla zinc smelter in Peru, the largest in Latin America, had been temporarily suspended after a fire that damaged smelting infrastructure.
“Between blasts at Kazzinc and a fire at Cajamarquilla you have a growing realisation that zinc is not as well supplied as the market has been anticipating,” broker Marex wrote in a note.
Even before these incidents, the International Lead and Zinc Study Group had expected there to be a 19,000 ton deficit in the refined zinc market this year.
Zinc stocks on the LME are at 110,875 tons, equivalent to less than three days of global consumption. Copper meanwhile fell 0.9percent to USD14,030 a ton, after hitting USD14,196.50 on Wednesday, the highest since January 29 when it notched its all-time peak of USD14,527.50. “Copper is taking a breather after a very strong run, with higher prices starting to weigh on buying interest in China,” said ING analyst Ewa Manthey, adding that there were early signs of Chinese exchange inventories rebuilding.
“That said, the bigger-picture supply risks haven’t gone away, so the pullback looks more like consolidation than a change in trend,” Manthey said.
Aluminium edged up 0.4 percent to USD3,665.50, near the four-year high struck on Wednesday after orders to withdraw another 10,000 tons of metal from storage in Port Klang, while lead added 0.1percent to USD2,011, nickel shed 0.7percent to USD19,050 and tin slipped 0.5percent to USD55,750.
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