Zinc surged above $3,000 a metric ton for the first time in almost a decade while aluminum approached a three-year high, adding momentum to a metals rally fueled by bets on tightening supplies and robust demand.
Zinc jumped as much as 5.8 percent to $3,132.50 a ton on the London Metal Exchange, the highest since 2007, before settling at $3,119 at 5:51 p.m. in London. Aluminum rose as much as 2.7 percent to the highest since September 2014, while nickel, copper and lead also advanced. The rally boosted mining shares, with Freeport-McMoRan Inc. among the biggest gainers.
An index of base metals has climbed to a more-than two-year high amid better-than-expected demand in China and a weakening dollar. The Asian nation is stepping up efforts to shut illegal aluminum and steel plants to cut emissions and excess capacity.
A push to promote economic growth in China ahead of a leadership reshuffle later this year is also lifting industrial-metals use, said Bernard Dahdah, an analyst at Natixis SA in London.
“Earlier this year, a lot of the rally was supply related, but recently we’ve seen demand starting to support as well,” Dahdah said by phone. Zinc rallied 60 percent last year as worldwide demand topped supply after producers including Glencore Plc suspended some output.
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