Zinc prices yesterday surged after Glencore PLC, the biggest producer of the metal, said it plans to cut output by about a third, adding to signs that commodity producers are willing to scale back supplies to combat slumping prices, boosting the prospects for a global deficit.
The metal, which is used to galvanize steel, jumped as much as 7.7 percent, the biggest intraday gain since 2009, to US$1,795 per tonne on the London Metal Exchange and traded at US$1,791 as of 3:14pm in Shanghai.
Zinc prices had slumped 23 percent this year as of Thursday’s close as slowing economic growth in China hurt the outlook for consumption.
Glencore chief executive officer Ivan Glasenberg has challenged rival miners this year to rein in output amid a commodities rout, saying in May that oversupplying markets regardless of demand damages the industry’s credibility.
Glencore has also cut copper and coal production this year.
Glencore shares rose 6.6 percent in Hong Kong trading, while other producers of the metal surged.
In Tokyo, Toho Zinc Co shares were up as much as 9.2 percent, giving it the second-biggest gain among shares listed on the Nikkei 225, while Mitsui Mining & Smelting Co, Japan’s top zinc smelter, saw its shares gain as much as 5.4 percent.
Shares in China’s biggest producer, Zhuzhou Smelter Group Co (株州冶鍊集團), increased by their daily trading limit of 10 percent, while those of India’s Hindustan Zinc Ltd were up as much as 6.4 percent to a two-month high.
Annual zinc supply is to be reduced by about 500,000 tonnes with the suspension of the Lady Loretta mine in Australia and the Iscaycruz project in Peru, while output from other projects in Australia, South America and Kazakhstan are to be reduced, Glencore said in a statement.
That is about 3.5 percent of global refined supply this year, according to Bloomberg calculations based on Morgan Stanley production data. The curbs are also to affect production of other metals, including lead.
“The main reason for the reduction is to preserve the value of Glencore’s reserves in the ground at a time of low zinc and lead prices, which do not correctly value the scarce nature of our resources,” the company said.
“Glencore remains positive about the medium and long-term outlook for zinc, lead and silver prices,” he said.
Prior to Glencore’s announcement, Morgan Stanley estimated in a report on Tuesday last week that the global zinc market would have a deficit of about 120,000 tonnes this year, 50,000 tonnes next year and 450,000 tonnes in 2017.
It forecast mine production to rise 2.7 percent next year and demand by 4 percent, leaving the market in a modest deficit, according to a separate note on Tuesday.
Lead supplies are to contract by about 100,000 tonnes, Glencore said in the statement.
Prices of all metals, except tin, traded in London gained at least 3 percent, with lead rising as much as 4.6 percent and copper climbing as much as 3.3 percent.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”