Zinc Rally Eases as LME Spreads Signal Tighter Supply

Zinc prices went down after recently reaching a high not seen in more than four years.

However, signs suggest that nearby supplies are becoming harder to find.

Zinc available immediately costs almost $200 more per ton than zinc delivered later.

This difference is called a spread, and it can show that buyers are worried about shortages.

Another short-term trading spread also rose sharply on the London Metal Exchange.

There is less zinc ore available, making it cheaper for miners to pay smelters to process it.

If these low processing fees continue, some smelters might reduce production.

A zinc plant in Spain briefly used less electricity, but this is not expected to significantly reduce its output.