Benchmark zinc on the London Metal Exchange hit $4,521.50, the highest since March 8. Prices of the metal, used to galvanize steel, hit a record high of $4,896 a tonne last month.
Click here for an interactive zinc price chart.
“Zinc inventories have drawn down sharply and the situation is worsening for European smelters to keep their margins positive amid fears of another power crisis,” said ANZ analyst Soni Kumari.
“The market sentiment for industrial metals was boosted by easing of transportation bottlenecks in China … further boost came from increasing economic support.”
Market analyst Fitch Solutions Country Risk & Industry Research has recently revised its 2022 zinc price forecast higher by more than 20% to $3,500 per tonne.
In a report, Fitch argues that metal prices are being bolstered by the energy crisis stemming from the ongoing Russian invasion of Ukraine that has led to many smelters halting or reducing zinc metal production.
Inventories
Concerns over spot supply have been growing in the zinc market this month, with a sharp rise in orders to withdraw stocks from LME warehouses helping to lift prices toward a record high.
Zinc stocks in LME-registered warehouses are at 120,825 tonnes, their lowest since June 2020 and down more than 40% since December.
China’s refined zinc output fell on both an annual and monthly basis in March as the covid-19 outbreak disrupted transportation of raw materials, state-backed research house Antaike said.
The nickel price jumped 4.9% to 215,060 yuan ($33,778.88) a tonne, after rising to its highest since March 31 earlier in the session.
(With files from Reuters and Bloomberg)
