Stating the ObviousFrom this mornings "metal bulletin.com":
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LIVE FUTURES 14/10: LME zinc price at highest since 2007; copper cash/3-month spread in backwardation
Supply concerns continue to support zinc's three-month price on the London Metal Exchange, which reached a peak of $3,837.50 per tonne on the morning on Thursday October 14, with most other base metal prices also starting the day higher.
Reports that Nyrstar - one of Europe and the world's major zinc producers - is set to cut production by up to 50% at its three European smelters in response to the surge in energy prices have fueled upside momentum, Fastmarkets' analyst James Moore said on Thursday.
"The plants have a combined capacity of 730,000 tonnes per year, which could equate to a reduction of up to 30,000 tonnes per month," Moore said.
"While we doubt Nyrstar will cut production by the full amount, with power constraints still overhanging Chinese smelters, any loss of metal will compound the currently tight fundamentals implied by the continue drawdown of global stocks," he added.
At the same time, others highlighted zinc’s strong demand prospects at present.
“We continue to hear that ex-China demand is strong, that steel companies and others are unlikely to flinch with current zinc prices. If you agree, the question is - what happens if China galvanizing steel, die-casting, brass making, rubber manufacturing, hence consumption, picks up...?," StoneX's head of base metal sales Michael Cuoco noted on Thursday.