Zinc rallied as Glencore Plc said it’s preparing to shut down production in Italy, adding to cuts already made elsewhere in Europe as high energy prices continue to hit the continent’s industrial base.
The Portovesme zinc sulphide line, which can produce 100 000 tons of metal a year, will be put on care and maintenance by the end of next month, Glencore said Monday in an emailed statement. Zinc prices rose as much as 3.7% on the London Metal Exchange before settling 3.4% higher at $3 348.50 at 5:53 p.m. local time, the biggest gain in a month.
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Heavy industries across Europe, from steel to fertilizer, have come under pressure from the surge in gas and power prices. Zinc production had already been hit hard, with supply cuts announced by Trafigura Group and Glencore sending prices surging 13% in October.
Supply outages have lent support to base metals prices in recent weeks, providing a counterweight to concerns that the energy crisis will soon hit industrial demand. Glencore said it will continue to review the decision against the backdrop of Europe’s energy market.
All other main LME metals prices were higher, with copper gaining 0.8% and nickel rising 1.5%. China’s physical copper premium eased to 1 175 yuan ($184) on Monday after spiking to a record on Friday as supply tightened. The surging premiums had deterred some purchases, Shanghai Metals Market said in a note.