9th Oct 2015 11:00
VIENNA (Alliance News) - Prices for industrial metals shot up Friday after major Swiss commodity group Glencore announced that it would reduce its production of zinc by 500,000 tonnes annually to support price levels.
Zinc intermittently reached a 4-week high of 1,830 dollars a ton.
Industrial metal prices have been falling over concerns about China's economy.
Glencore's cut amounts to 3.7% of last year's global zinc mining, according to data by the International Lead and Zinc Study Group, a UN body.
"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 at its headquarters in Baar.
The decision would lead to job cuts at its operations in Australia, Kazakhstan and Peru, Glencore said.
Lead, copper and silver prices also rose on Friday.
"The planned zinc cuts also have an impact on lead and silver, because both of these metals are often mined together with zinc," analysts at Commerzbank in Frankfurt wrote.
Zinc is one of the most important industrial metals. It is used as an anti-corrosive coating, as a raw product for making brass, and in sun-screen skin products.
Copyright dpa
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