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Aluminium prices gained on Thursday as Europe continued to grapple with a power crisis that has curtailed production of the energy-intensive metal.
Three-month aluminium on the London Metal Exchange had advanced 1% to $2,293.50 a tonne by 1000 GMT.
About half of the European Union’s aluminium and zinc production capacity “has already been forced offline due to the power crisis”, industry association Eurometaux said.
“Energy-intensive metals could continue to outperform for the time being because electricity shortages in Europe could become more exacerbated in the winter,” said Amelia Xiao Fu, head of commodity market strategy at Bank of China International.
“The difficult situation is that some smelters are at risk of closing down if the situation persists.”
LME zinc, another metal that requires large amounts of energy to produce and has seen cutbacks in output, was little changed at $3,228.50 a tonne after retreating from earlier gains.
Fitch Solutions projected the global zinc market to post a deeper deficit of 228,000 tonnes in 2022 from a shortfall of 48,000 tonnes in 2021, before switching to be in a surplus of 13,800 tonnes in 2023, it said in a report.
“A complete shutdown of Russia’s gas deliveries to Europe,” which would rapidly accelerate the pace zinc refinery capacity in the region was taken offline, said Fitch Solutions.
Other metals prices were lacklustre, weighed down by worries that aggressive central bank rate hikes would push the global economy into recession.
Many investors and analysts expect the Federal Reserve will raise U.S. rates by another 75-100 basis points next week, keeping the dollar firm and putting pressure on risky assets like commodities and equities.
LME copper CMCU3 was down a touch at $7,799.50 a tonne, nickel CMNI3 rose 0.4% to $24,315, lead CMPB3 edged up 0.1% to $1,965 and tin CMSN3 added 0.2% to $21,210.