Copper – Aluminium – Zinc: Rising prices as the energy crisis unfolds

The world’s major metals continued to climb on Friday, with zinc posting its biggest daily gain in six years after hitting a 14-year high on Wednesday and aluminium holding close to a 13-year high, as energy shortages continue to disrupt the global supply chain.

Producers of industrial metals, from zinc to aluminium, are curtailing production as energy costs rise above peak metal prices, or because of power constraints in key economies such as China.

The latest casualty has been global miner and metals trader Glencore, which has seen zinc production at its three European plants cut due to rising energy prices. This follows an earlier announcement that Nyrstar, another major producer, plans to cut production at three European smelters by up to 50% due to rising energy prices and costs associated with carbon emissions.

Zinc rose as much as 12% on the London Metal Exchange (LME) in response, the biggest rise since October 2015. The industrial metal is now sitting at its highest since 2007, with pressure continuing to pile on producers after a wave of smelter closures across Europe.

Aluminium, which is particularly energy intensive, also gained on Friday, taking its year-to-date advance to 62%. Earlier this week, aluminium hit its highest since 2008 as the deepening energy crisis squeezed supplies of the metal used in everything from beer cans to iPhones.

Matalco Inc, the largest U.S. producer of aluminium billets, is also warning customers it could cut production and ration deliveries as early as next year because of a magnesium shortage.

Friday’s gains come after the benchmark index of six base metals on the LME rose to an all-time high on Thursday. Year-to-date, the LMEX index has gained 35 percent.