Aluminum, Zinc Jump on China Infrastructure Fears

Analysts worry that the latest earthquake in China could cause a shortage of aluminium and zinc, due to the earthquake disrupting both the smelting process and the hydropower that Sichuan produces. From Reuters:

Aluminium and zinc prices jumped on Friday amid mounting fears over supplies from China and worries about infrastructure in Sichuan province after a devastating earthquake there this week.

Analysts estimate Sichuan has about 500,000-700,000 tonnes a year — about 4 percent of the total in China — of aluminium smelting capacity. The region also produces about 200,000 tonnes of zinc a year.

“The most important metals on the refined side are aluminium and zinc,” said Michael Widmer, an analyst at Lehman Brothers.

“Producers need to use power and roads to get their material out … It’s a tricky situation.”

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