LONDON, March 29 (Reuters) – London Metal Exchange (LME) zinc recorded a new all-time high of $4,896 per tonne earlier this month, eclipsing the previous 2006 peak of $4,580 per tonne.
True, the March 8 spike was over in a matter of hours and looked very much like the forced close-out of positions to cover margin calls in the LME nickel contract, which was imploding at the time before being suspended. But zinc has since re-established itself above the $4,000 level, last trading at $4,100 per tonne, amid escalating supply chain tensions.
Russia’s invasion of Ukraine, which Moscow calls a special military operation, doesn’t have any direct impact on zinc supply as Russian exports are negligible. But the resulting increase in energy prices is piling more pressure on already struggling European smelters.
European buyers are paying record physical premiums over and above record high LME prices, a tangible sign of scarcity which is now starting to spread to the North American market. The world is not yet running out of the galvanising metal but a market that even a few months ago was expected to be in comfortable supply surplus is turning out to be anything but.
For the rest of this column: https://www.reuters.com/markets/commodities/european-smelter-squeeze-keeps-zinc-close-record-highs-2022-03-29/