17 Aug Zinc climbs to highest price in decade amid reducing Chinese stockpiles
The price of zinc has surged to its highest level since November 2007, owing to a shortage of the metal and shrinking stockpiles in China, which consumes nearly 40% of global supply.
Zinc traded above US$3,000 a tonne on the London Stock Exchange (LSE), boosting the shares of Glencore and Vedanta Resources, whom both produce significant quantities of the metal which has multiple uses, but is primarily used for metal galvanising.
Swiss-based miner Glencore reduced its zinc production by 500,000 tonnes back in 2015, with the intention of reversing a global price slump for the commodity. Zinc prices have risen by over 90% since then.
This idling of zinc output has been mimicked in China over the last two years, which has further contributed to the driving up of prices, making Chinese zinc profitable to import for major international players.
China has also taken a stricter approach to monitoring domestic zinc production, and has restricted production in certain provinces, according to Chinese metal consultancy SMM.
“There is still a possibility for a further rise in zinc prices,” said SMM.