Zinc gains as Chinese output falters ahead of winter shutdowns

LONDON — Zinc prices rose on Monday after data showed output in China slipped in September, highlighting worries that winter production cuts are tightening supplies of metals.

Data on Monday showed zinc production fell 2.70% last month to 537,000 tons after numbers last week showed aluminum output dropped 5.60% to 2.60 million tons, its lowest since April 2016.

“It could be that the winter production cuts are already having an impact. I do see this as a factor supporting prices for the remainder of the year,” said Caroline Bain, chief commodities economist at Capital Economics in London.

Metals rose across the board on the London Metal Exchange (LME), still basking in the glow of last week’s firm growth data in China, the world’s biggest metals consumer.

“I think it’s a continuation of the positive sentiment from last week,” Ms. Bain said.

That data showed the world’s second-largest economy grew at 6.80% in the third quarter and remained on track to post the first full-year pickup in seven years.

The head of the state planning agency said on Saturday that China’s economy was on track to meet its off icial growth target for 2017 despite a punishing war on pollution.

Benchmark LME zinc closed up 0.90% at $3,129 a ton after dipping 0.50% on Friday.

The premium of cash zinc over three- month zinc remained elevated at $57 a ton, showing nearterm supply was still limited. It was down from a peak of $91 on Oct. 12 but still much higher than the peak for the year before midSeptember of $11.

Chinese zinc mine output has been impacted more than copper due to the small-scale of zinc mines, said analyst Natasha Kaneva at JPMorgan. “This year, throughout August, nearly 60% of Sichuan province’s zinc concentrate production… was reportedly shuttered during the last round of inspections,” she said in a note.

Three-month copper finished 0.80% firmer at $ 7,004 a ton, despite data showing Chinese refined copper output rose 6.80% in September to its highest since December 2014.

LME nickel ended 1.10% higher at $11,860 a ton, bolstered by gains in Chinese steel prices.

Aluminum added 0.10% to close at $ 2,137, lead climbed 1.20% to $2,500 and tin inched up 0.02% to $19,580. —