BEIJING/HANOI, August 17 (Reuters) – Zinc prices in Shanghai hit a two-month high on Wednesday after a rally in London the day before, sparked by news of the closure of European smelter Nyrstar.
The most traded September zinc contract on the Shanghai Futures Exchange SZNcv1 rose 2.8% to 25,485 yuan ($3,756.30) per tonne at 0220 GMT, after hitting its highest since June 16 earlier in the session of 25,935 yuan per tonne.
Nyrstar NYR.BR announced on Tuesday that it would place its zinc smelting operations at Budel in the Netherlands on care and maintenance from September 1.
This fueled fresh supply fears, as the Belgian company had already cut production by up to 50% at its three European zinc smelters, while Glencore GLEN.L said this month that “the current energy supply and price environment poses a significant threat.”
Three-month zinc on the London Metal Exchange (LME) jumped 7.2% to a two-month high of $3,819 a tonne, but then gave up most of the gain.
Meanwhile, the latest electricity controls in China, the world’s largest producer of metals, have also raised concerns about metal supplies.
Southwestern Sichuan Province ordered industrial users to halt production from Aug. 15-20 to prioritize residential power supply amid heatwaves, disrupting production of metals including lithium, aluminum and zinc.
Aluminum ShFE SAFcv1another energy-intensive metal, rose 2.7% to 18,470 yuan a ton, copper SCFcv1 rose 0.3% to 61,920 yuan per ton, nickel SNIcv1 gained 0.6% to 173,430 yuan per tonne, lead SPBcv1 also climbed 0.6% to 15,110 yuan a ton.
LME aluminum CMAL3 rose 0.8% to $2,411 per tonne, zinc CMZN3 was down 1% at $3,637 a tonne, copper CMCU3 held at $7979.50 per ton, while lead CMPB3 lost 0.3% to $2,158 a tonne.
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($1 = 6.7846 Chinese Yuan)
(Reporting by Siyi Liu in Beijing and Mai Nguyen in Hanoi; editing by Uttaresh.V)
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