(Bloomberg) -- Zinc held its biggest advance since at least
1989 after Glencore Plc, the biggest miner of the metal, said Friday it plans to cut output by about a third. Shares in Korea Zinc Co. soared as much as 12 percent, the biggest intraday increase since 2011.
The metal used to galvanize steel rose as much as 1 percent to $1,855 a metric ton on the London Metal Exchange before trading at $1,826 by 10:52 a.m. in Hong Kong. Prices surged 10 percent Friday to the highest close in two months. Copper added as much as 0.6 percent to near a three-week high.
Metals capped their biggest weekly increase since May after Glencore announced its plan to cut zinc output, signaling some commodity producers are willing to scale back supply to combat declining prices. The slowdown in China’s economy, the world’s second-largest, is a headwind for industrial metals such as copper and aluminum, Goldman Sachs Group Inc. says. Trade data scheduled Tuesday will provide further clues on the country’s growth.
“A stronger-than-expected pickup in imports could see prices well supported this week,” Daniel Hynes, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Sydney, said by e-mail. “Interest will also be on the supply side, with the impact of Glencore’s cut in zinc production flowing into the rest of the sector.”
Stock Boost
Glencore’s cuts have helped other producers. Shares in Korea Zinc rallied in Seoul on Monday, catching up on last week’s gains in zinc prices, as IBK Securities Co. upgraded the stock to buy from neutral. The company climbed as much as 12 percent before trading 5.9 percent higher.
The global zinc market should swing to a deficit of 152,000 tons in 2016 from a surplus of 88,000 tons this year, as reductions in mine supply outside of China will curb output growth, the International Lead & Zinc Study Group said Friday.
The forecasts, prepared before Glencore’s announcement, don’t reflect the cuts, the group said.
Zinc for December delivery on the Shanghai Futures Exchange jumped as much as 4.8 percent before trading 2.8 percent higher.
On the LME, nickel rose 0.7 percent, while aluminum and tin retreated.
Industrial metals in London have tumbled 16 percent this year amid the slowest Chinese expansion in a generation. Whether a turnaround is imminent or more gloom lies ahead will dominate conversation at LME Week, the annual gathering of miners, traders and buyers that starts in London on Monday.
1989 after Glencore Plc, the biggest miner of the metal, said Friday it plans to cut output by about a third. Shares in Korea Zinc Co. soared as much as 12 percent, the biggest intraday increase since 2011.
The metal used to galvanize steel rose as much as 1 percent to $1,855 a metric ton on the London Metal Exchange before trading at $1,826 by 10:52 a.m. in Hong Kong. Prices surged 10 percent Friday to the highest close in two months. Copper added as much as 0.6 percent to near a three-week high.
Metals capped their biggest weekly increase since May after Glencore announced its plan to cut zinc output, signaling some commodity producers are willing to scale back supply to combat declining prices. The slowdown in China’s economy, the world’s second-largest, is a headwind for industrial metals such as copper and aluminum, Goldman Sachs Group Inc. says. Trade data scheduled Tuesday will provide further clues on the country’s growth.
“A stronger-than-expected pickup in imports could see prices well supported this week,” Daniel Hynes, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Sydney, said by e-mail. “Interest will also be on the supply side, with the impact of Glencore’s cut in zinc production flowing into the rest of the sector.”
Stock Boost
Glencore’s cuts have helped other producers. Shares in Korea Zinc rallied in Seoul on Monday, catching up on last week’s gains in zinc prices, as IBK Securities Co. upgraded the stock to buy from neutral. The company climbed as much as 12 percent before trading 5.9 percent higher.
The global zinc market should swing to a deficit of 152,000 tons in 2016 from a surplus of 88,000 tons this year, as reductions in mine supply outside of China will curb output growth, the International Lead & Zinc Study Group said Friday.
The forecasts, prepared before Glencore’s announcement, don’t reflect the cuts, the group said.
Zinc for December delivery on the Shanghai Futures Exchange jumped as much as 4.8 percent before trading 2.8 percent higher.
On the LME, nickel rose 0.7 percent, while aluminum and tin retreated.
Industrial metals in London have tumbled 16 percent this year amid the slowest Chinese expansion in a generation. Whether a turnaround is imminent or more gloom lies ahead will dominate conversation at LME Week, the annual gathering of miners, traders and buyers that starts in London on Monday.
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