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Glencore Cuts Zinc Output, Prices Surge

October 9, 2015 at 20:07 by Vladimir Vyun

Prices for zinc surged today as Glencore, the world’s biggest miner of zinc ore, announced that it is going to reduce its output by 500,000 tons, which equals 4 percent of global supply. The company explained its decision in the following manner:

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.

Indeed, prices for the metal have tumbled 30 percent since May to the lowest level in five years. Nevertheless, the company remained optimistic:

Glencore remains positive about the medium and long term outlook for zinc, lead and silver prices.

Glencore has also cut output of copper recently. This (as well as yesterday’s Federal Reserve minutes) contributed to the rally of the industrial metal.

December contract for delivery of copper jumped 3.05 percent to $2.4145 per pound as of 19:31 GMT on COMEX today. Reuters reported that prices for zinc soared more than 10 percent to $1,845 per metric ton as of 16:00 GMT.

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