Zinc rallied to the highest since October, putting the metal on track to enter a bull market, after production cuts tightened global supplies. Other metals and mining shares climbed.
Zinc soared 21 percent in about six weeks after Glencore Plc and Nyrstar NV last year announced production cuts to cope with a slump in prices. The market will have a deficit of 440,000 metric tons this year, the most in more than a decade, according to Mitsui Mining & Smelting Co.
“The supply-side factor — the dip in output — is the reason for the price rise,” Casper Burgering, a senior economist at ABN Amro Bank NV in Amsterdam, said by phone. “There is really no reason for these low prices and I think that markets have started to realize that.”
Zinc added 1.9 percent to $1,777.50 a ton as of 11:39 a.m. in London. A close at this level would represent an increase of more than 20 percent from its Jan. 12 low, the common definition of a bull market.
The metal is also rising as steel prices advance in China, Daniel Hynes, a senior commodities strategist at Australia & New Zealand Banking Group Ltd., said by phone from Sydney.
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