Zinc set to explode31 Mar 2022 21:51
Much has been said about the trials and tribulations of the aluminum market, particularly of the impact on smelter output from energy rationing in China last year and then rapidly escalating energy prices in Europe this winter.
Russia’s invasion of Ukraine turbocharged prices. Fears rose over already constrained oil and natural gas supplies to Europe getting even worse. In the face of rapidly escalating energy costs, European smelters began partial and even complete closures of smelters pending a drop in power costs.
But, of course, the dynamic driving aluminum prices has been having exactly the same impact on all smelting or refining processes that are heavily reliant on electricity. For example, EAF blast furnaces for steel have also faced similar pressures.
Today, however, we’ll take a look at zinc smelters and zinc prices.
Rising zinc prices
Zinc is not normally considered a sister metal to aluminum. However, from a cost of production profile, it is remarkably similar.
So, it’s no surprise that Reuters reports the same dynamic playing out in Europe for zinc as for aluminum.
Firstly, exchange and trade inventory has been falling dramatically. It’s fallen to the point where the LME’s European warehouses are virtually empty when cancellations pending physical loadout are taken into account.
LME-registered stocks in the United States have fallen to a low of 25,925 tons. Available tonnage is lower still at 19,825 tons, the post reports. That compares to this time last year, when New Orleans alone held almost 100,000 tons of zinc.
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