Zinc Prices Reach Four-Year High Amid Supply Chain Disruptions

Zinc prices surged to their highest level in over four years on September 1st, driven by supply chain disruptions and production issues. The metal, used to coat steel, rose as much as 2.5% to $3,980.50 a ton on the London Metal Exchange (LME). This marks the fifth consecutive monthly gain for zinc, with prices increasing by 27% this year.

The supply squeeze is attributed to various factors, including the ongoing war in the Middle East, which has choked off Iranian ore supplies, and production disruptions at mines in China. Chaos Ternary Futures Co. noted that 'there are frequent disturbances on the supply side.' With global zinc stockpiles remaining below 100,000 tons, smelters are facing pressure to accept tougher terms from miners.

As a result, smelter treatment charges plummeted to minus $117.50 a ton in August, indicating the severity of the supply shortage. Meanwhile, copper prices also gained 0.6% to reach $14,382 a ton on the LME.