LONDON, Oct 6 (Reuters) – Europe’s energy crisis is taking a rising toll on the region’s industrial capacity with another zinc smelter going into care and maintenance. Glencore (GLEN.L) is curtailing production at its Nordenham plant in Germany citing “various external factors affecting the business and wider European industry.”
It’s the third West European zinc smelter to close over the last year as operators struggle to cope with surging power prices. Smelting has turned out to be the weakest link in the global zinc supply chain this year, creating pockets of extreme tightness in the physical market.
The rolling supply woes contrast with an increasingly negative demand picture and the bear-bull tension is manifest in continued price and time-spread volatility on the London Metal Exchange (LME) contract as traders try and work out whether supply or demand is falling faster.
The LME’s overnight move to limit the deliverability of Russian zinc won’t have much impact on physical supply but a near 5% jump in the zinc price to $3,193 per tonne is a sign of the collective uncertainty.
EUROPEAN SHUTDOWNS
The Nordenham smelter, which produces around 165,000 tonnes per year of refined zinc and alloy, will be shuttered from the start of next month.
For the rest of this article: https://www.reuters.com/markets/commodities/third-european-smelter-closure-compounds-zinc-conundrum-2022-10-06/