- Glencore plans to trim annual zinc production by 500,000 tons
- Copper futures rise 3 percent, the most in more than a week
Zinc surged the most since at least 1989 after Glencore Plc, the biggest miner of the metal, said it plans to cut production by about a third.
The metal used to galvanize steel jumped as much as 12 percent. It led a surge in industrial metals from copper to nickel as the reduction in output signaled that some commodity producers are willing to scale back supply to combat declining prices.
Zinc has slumped 16 percent this year 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. The Baar, Switzerland-based company’s shares rose as much as 16 percent in London.
“This is a tremendous rally from an overall short position as production cuts across metals intensify, mining house equities recover and as, at least outside of China, economies perform quite well,” Michael Turek, the head of base metals at BGC Partners Inc. in New York, said in an e-mail.
Other producers also surged. Vedanta Resources Plc gained 12 percent and Nyrstar NV rallied 11 percent in Brussels. In North America, Teck Resources Ltd. climbed 2.4 percent and Southern Copper Corp. added 3.1 percent.
Zinc for delivery in three months gained 10 percent to settle at $1,836 a metric ton at 5:50 p.m. on the London Metal Exchange.
Aluminum, lead, copper, tin and nickel also gained in London.
In New York, copper futures for December delivery added 3 percent to $2.414 a pound on the Comex, the biggest gain for a most-active contract since Sept. 30.