Off The Wire
METALS-Zinc jumps on supply fears as fire hits big Russian operation
Three-month zinc on the London Metal Exchange (LME) gained 1.8% to $2,613.50 a metric ton by 1700 GMT, the highest level since Oct. 2. A fire was extinguished on Wednesday at Russia's Ozerny mining and processing plant and the company was assessing the possible impact on the planned start next year of full-scale operations at the country's largest zinc deposit, a spokesperson said. Morgan Stanley this month said that Ozerny, also known as Ozernoye is expected to produce 350,000 tons of zinc a year.
"This is potentially a very bullish development for the zinc market, as it (Ozernoye) is scheduled to become one of the largest zinc mines in the world," said Dan Smith, head of research at Amalgamated Metal Trading.
"There has already been a lot of talk about mine closures and how close the price is to the cost floor."
Nyrstar last week said it planned to close two U.S. zinc mines temporarily at the end of November because of weak prices and the impact of inflation - the third shutdown of zinc operations by producers in recent months. Adding to supply concerns, LME zinc inventories have more than halved since early September.
In China's spot market, the copper premium rallied on low stocks to stand at 335 yuan a ton on Tuesday, close to a two-month high touched in late October. October refined copper production in China was below expectations. The Shanghai Metals Market assessed it at 993,800 tons, down 1.8% from the previous month. LME copper shed 0.6% to $8,135 a ton while aluminium was flat at $2,265, nickel climbed 1.2% to $18,125, lead added 0.1% to $2,190 and tin gained 1% to $24,815. For the top stories in metals, click (Reporting by Eric Onstad Additional reporting by Julian Luk and Polina Devitt in London and Siyi Liu in Beijing Editing by Barbara Lewis, David Goodman, Elaine Hardcastle)
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