Off The Wire
METALS-Zinc hits two-month peak as Nyrstar shutdown stokes supply fears
"That theme is ongoing due to tightness in the electricity and power market in Europe," said Xiao Fu, head of commodity market strategy at Bank of China International. "Market inventories have fallen to very low levels and we would expect stocks to continue to fall in Europe." Low water levels on the Rhine were an added concern because shipping disruptions could further restrict metals supply, she said.
Dutch gas prices for September hit their highest since March this week, driven by a European heatwave. Hot weather increases the use of air conditioning, boosting energy demand. Citi on Monday upgraded its zinc price forecast for the next three months to $3,200 a tonne from $2,800, saying it expected concern about an economic downturn to weigh on all base metals prices but that zinc would outperform. "We project greater forecast cuts to European zinc smelter output as winter power shortages play out," Citi said in a note. LME aluminium , another energy-intensive metal, rose 0.2% to $2,394.50 a tonne.
Aluminium producer Henan Zhongfu Industrial said it was suspending production this week as China's Sichuan province rationed industrial electricity consumption in its most severe heatwave in 60 years. Among other metals, LME copper dipped 0.1% to $7,975 a tonne, lead slipped 1.2% to $2,151 and tin shed 0.1% to $24,695, while nickel climbed 0.9% to $22,210. For the top stories in metals and other news, click or ($1 = 6.7953 yuan) (Reporting by Eric Onstad Editing by Robert Birsel, David Goodman, Paul Simao and Barbara Lewis)
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