Zinc gains on potential for further smelter shutdowns
LONDON - Zinc prices climbed on Friday, lifted by fears of further smelter closures owing to high power prices, while other metals gained after better than expected Chinese factory data.
Three-month zinc CMZN3 on the London Metal Exchange (LME) advanced 1.9% to $2 986 a tonne by 10:10 GMT.
"The supply side has really deteriorated in zinc, which is one of the few metals that has quite a big production base in Europe," said Caroline Bain, chief commodities economist at Capital Economics.
"It has been particularly hard hit by closures and I think there's probably more to come on that front."
Soaring electricity prices in Europe have also triggered cuts in energy-intensive production of aluminium.
Other metals prices gained after factory activity in top metals consumer China expanded unexpectedly in September, returning to growth after two consecutive months of contraction.
"The improved data buoyed market confidence," said a Chinese copper tube producer source who expects rising demand and tight inventories to remain in the coming month.
LME copper CMCU3 added 0.7% to $7 595 a tonne but is set to end the quarter with a loss of about 8%, pressured by dollar strength while the US Federal Reserve raised interest rates and China grappled with Covid-19 shutdowns.
Also supporting the market was data showing copper inventories in warehouses monitored by ShFE fell to 30,459 tonnes on Friday for their lowest since January 21 and down 54.3% from 66 661 tonnes on July 1.CU-STX-SGH
A possible LME ban on Russian metal including nickel, aluminium and copper further exacerbated supply concerns.
LME aluminium CMAL3 rose 0.8% to $2 215 a tonne, lead CMPB3 gained 0.5% to $1 886, nickel CMNI3 was up 1% at $22 560 and tin CMSN3 rose 1.3% to $20 780.
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