LONDON, Aug 10 (Reuters) – The London Metal Exchange (LME) zinc price jumped to a six-week high last week after Glencore (GLEN.L) warned of the continuing margin squeeze on its European smelters. The commodities powerhouse idled part of its Portovesme smelter in Italy at the end of 2021 due to high power prices.
Europe’s power crunch has got much worse in the intervening months after Russia launched what it calls its “special military operation” in Ukraine at the end of February.
What looked at the time like a seasonal power price spike has morphed into structurally higher pricing. It’s a “very challenging” time to be in the zinc smelting business, Glencore said.
This isn’t really news, but the reminder from one of the market’s biggest operators was enough for the LME three-month price to spike higher to $3,554.50 per tonne, up 26% from its July low of $2,824.50. Last trading around $3,480, zinc’s fortunes will now depend on whether high power pricing hits production or demand hardest.
For the rest of this column: https://www.reuters.com/markets/commodities/glencores-smelter-warning-galvanises-zinc-price-andy-home-2022-08-09/