The zinc price rose on Monday as Glencore Plc announced it鈥檚 preparing to shut down production in Italy.
The Portovesme line, which can produce 100,000 tonnes of zinc sulphide a year, will be put on care and maintenance by the end of the year.
The decision to close the plant follows a sharp increase in power prices in Italy and the rest of Europe, Glencore said.
Zinc prices rose as much as 3.4% to $3,349.50 a tonne on the London Metal Exchange, the biggest gain in a month.聽
Zinc production had already been hit hard, with supply cuts announced by Trafigura Group, Nyrstar and Glencore sending prices surging 13% in October.聽
Click here聽for an interactive chart of zinc prices
Global zinc production is estimated at about 14 million tonnes this year, with about half of that expected to come from China, the world鈥檚 largest producer.
The metal is聽mainly used to聽galvanise聽steel or iron聽by applying聽a zinc coating to stop聽rusting.聽Galvanised steel is used聽in buildings, cars and electronics.聽
Fitch Solutions聽forecasts an average zinc price of $2,600 per tonne in 2021.
鈥淭he global production surplus that emerged in 2020 should persist into the medium term, and the resulting increase of zinc inventories should gradually drag prices lower,鈥� the analyst said in a recent聽report.
(With files from Reuters and Bloomberg)