Base metals surged, led by zinc which spiked to the highest since 2007 after European smelters became the latest casualties in a global energy crisis that’s knocking supply offline and heaping pressure on manufacturers.
Zinc rose as much as 6.9 per cent on the London Metal Exchange, and a gauge of six industrial metals rapidly closed in on an all-time high. Aluminum, one of the most energy-intensive commodities, is at the highest since 2008.
Copper bounced closer to the US$10,000-a-ton mark, and spreads are pointing to a sharply tighter market — spot copper contracts are trading at the biggest premium over futures in nearly a decade as global inventories shrink.
Metal supply cuts are spreading from China to Europe, as energy shortages drive up costs for electricity and natural gas, threatening more inflationary pressure from rising commodity prices. The latest big catalyst came on Wednesday when Nyrstar — one of the biggest zinc producers– said it will cut output at three European smelters by up to 50 per cent due to rising power prices and costs associated with carbon emissions.
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