How is the European Energy Catastrophe Posing a Great Threat to the Zinc Supply?
- 08-Aug-2022 5:31 PM
- Journalist: Timothy Greene
Major Zinc smelter Glencore issued a warning on Thursday night, August 4, stating that the European energy crisis poses a serious threat to the supply of Zinc. This warning caused both domestic and international zinc prices to reach a new high. After top producer Glencore Plc forewarned that Europe's energy crisis holds a danger to supply, Zinc prices increased to their highest level in nearly five months, driving the prices of other metals higher.
One of Glencore's Zinc smelters in Europe has already stopped operating, significantly reducing the company's metal output for the year. On Thursday, it revealed that its other smelters in the area are hardly making any profit. According to the business, while dangers to industrial metals demand are growing, Europe's power crisis is also having a significant impact on supply prospects.
Zinc stocks on the LME (London Metal Exchange) have decreased in half during the last three months. Prices for Zinc overseas dramatically increased as supply issues arose. On the LME, Zinc was trading 5.3 per cent higher at around $3,400 a metric tonne, up more than 7.5 per cent from the previous day—the biggest intraday rise since March 8.
Europe's Natural gas supply situation is getting worse from an international supply standpoint, which, when combined with the effects of the high temperatures, maintains the high cost of both natural gas and electricity. Given that Europe produces about 30% of Zinc produced outside of China, the current energy supply and price situation is largely posing a big menace to the supply and demand sides of the market, according to Glencore's half-year profits report. Most basic indications still point toward tight market conditions, especially in the West.