Zinc hits more than four-year high on supply fears

Business Recorder reported that London zinc climbed to its loftiest level in over four years on Tuesday, as worries about supply and scarce stock beyond China lifted prices. The three-month benchmark on the London Metal Exchange rose 2.34% to $3,974 a metric ton, having reached $3,980.5 earlier, a level last seen in May 2022.

Shanghai's most-traded zinc contract gained 2.94% to 27,130 yuan ($4,036.90) a ton, after an earlier peak of 27,165 yuan, the highest since January 2026. Refined stocks outside China have shrunk, and tight supply has pulled metal into overseas warehouses. Analysts at Chinese broker Jinrui Futures said in a note that domestic inventories dropped sharply on Monday, and zinc's August rally marked its strongest monthly performance since January.

Tight supply of raw zinc concentrate has squeezed refiners, prompting some to bring forward maintenance plans. Treatment charges for concentrate have turned sharply negative, so refiners now pay miners for the processing work. Speculative bullish bets on the LME have reached a peak last matched in the second quarter of 2022, according to Marex data.