Market and product

Industrial metals climbed, with zinc scaling 10-year highs in Shanghai and London amid a shortage of ore, as contracts were lifted by supply constraints and faster global economic growth.

Zinc soared by its daily limit to 25,975 yuan a ton on the Shanghai Futures Exchange, rising 5 percent to its best mark since October 2007. In London, prices advanced as much as 0.9 percent to $3,147 a ton, a level not seen in almost 10 years. The rally was spurred by data showing China’s daily production in July contracting to the lowest level in three years.

Aluminum in Shanghai hit a six-year high, while copper on the London Metal Exchange saw a three-year peak as the rally gathered pace. Iron ore futures in Singapore were up 5.1 percent.

“Every single base metal has its own hot spot story,” Wang Xiaoqi, an analyst with China Merchants Futures Co., said via Wechat. Despite a recent slowdown by some measures in China’s economy, the broad supply-demand picture remains resilient, he said.

At the same time, the world economy seems on its way to a year of faster growth after rising at its most rapid pace in 2 1/2 years in the second quarter, with previous laggards such as Japan and the euro area now recovering. Metals have been given a fillip by a weaker dollar, which has slid almost 9 percent this year, and came under further pressure following relatively dovish comments from the Federal Reserve on Wednesday.

Drivers such as Chinese capacity curbs that have boosted aluminum also apply to the ferrous sector. Steel reinforcement bar in Shanghai, bolstered by the surge in base metals, rose 2.8 percent from a two-week closing low, while iron ore in Dalian added 5.8 percent.

Metals stocks caught the bug, with Zhuzhou Smelter Group, China’s top zinc producer, surging as much as 8.7 percent in Shanghai. Aluminum Corp. of China Ltd. gained as much as 6.3 percent in Hong Kong ahead of first-half earnings, while global metals miner and trader Glencore Plc was up as much as 3.2 percent. - Bloomberg -