Zinc prices surged to a two-week high on Monday, driven by tightening supplies and rising power costs. The benchmark three-month zinc contract on the London Metal Exchange (LME) climbed 2.1% to $3,821.50 per metric ton, peaking at $3,825, the highest since October 12.
Analysts at Citi noted a neutral to modestly bullish sentiment around zinc, cautioning that while mine supply is expected to grow in 2027, market optimism may be overstated given past underperformance. The global refined zinc market shifted to a deficit of 3,900 tons in August, reversing a surplus of 27,500 tons in July, according to the International Lead and Zinc Study Group.
Support for zinc prices came from high power prices, declining production in Peru, and shrinking inventories. Shanghai Futures Exchange zinc stocks dropped 5% to 137,139 tons, the lowest since March, while LME inventories stood at 133,700 tons. Bank of America highlighted that China’s limited zinc exports should continue to underpin prices.
Elsewhere, copper edged up 0.1% to $14,341 per ton, unaffected by a strike at Teck Resources’ Highland Valley copper mine. The Yangshan premium, a key indicator of China’s copper demand, hit $178 per ton, the highest since 2014, as Shanghai Futures Exchange copper stocks fell over 25%. Other metals saw mixed movements, with aluminium and nickel declining, while tin and lead posted gains.