(Updates prices, adds U.S. data)
By Eric Onstad
LONDON, Sept 30 (Reuters) – Zinc prices climbed on
Friday, lifted by fears of further smelter closures owing to
high power prices, while some other metals gained after better
than expected Chinese factory data.
Three-month zinc on the London Metal Exchange (LME)
advanced 1.3% to $2,966 a tonne by 1400 GMT.
“The supply side has really deteriorated in zinc, which is
one of the few metals that has quite a big production base in
Europe,” said Caroline Bain, chief commodities economist at
“It has been particularly hard hit by closures and I think
there’s probably more to come on that front.”
Falling inventories have also supported zinc prices,
including those in warehouses linked to the Shanghai Futures
Exchange, which reported a weekly tumble of 32% on Friday. Soaring electricity prices in Europe have also triggered
cuts in energy-intensive production of aluminium.
Other metals prices gained after factory activity in top
metals consumer China expanded unexpectedly in September,
returning to growth after two consecutive months of contraction. Some of those gains, however, were pared back in European
afternoon trading due to a strong dollar index as U.S.
data showed high inflation, providing more ammunition for
aggressive central bank interest rate hikes. A firmer dollar makes commodities priced in the U.S.
currency more expensive for buyers using other currencies.
LME copper rose 0.3% to $7,568 a tonne, but was set
to end the quarter with a loss of about 8%.
Copper was earlier supported by data showing inventories in
warehouses monitored by the Shanghai Futures Exchange fell to
30,459 tonnes on Friday for their lowest since Jan. 21 and down
54.3% from 66,661 tonnes on Jul. 1. A possible LME ban on Russian metal including nickel,
aluminium and copper further exacerbated supply concerns. LME aluminium shed 0.7% to $2,181.50 a tonne and tin dipped 0.1% to $20,495, but nickel added 0.3% to
$22,420 and lead gained 1.1% to $1,897.
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(Reporting by Eric Onstad
Additional reporting by Siyi Liu and Dominique Patton in Beijing
Editing by David Goodman and Elaine Hardcastle)
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