London, Oct 13 (Reuters) - Zinc and aluminium prices surged to multi-year highs on The London Metal Exchange (LME) on Wednesday as smelters cut production due to a power crisis.
Shanghai prices hit their highest in nearly 14 years, while London prices jumped more than 5 percent to their highest in more than three-and-a-half years after Nyrstar said it would cut production by 50 percent at three of its European zinc smelters as power costs soared.
Electricity prices have reached record highs in recent weeks, driven by power shortages in Asia and Europe. China's power supply crisis is expected to last until the end of the year and dampen growth in the world's second-largest economy.
But a surge in electricity prices could also hit industrial output and weaken demand for metals, one analyst warned.
"We should not forget that the power crisis has hit not only producers of base metals but also those further down the value chain," said Daniel Briesemann at Commerzbank.
LME zinc for three months rose 5.4 percent to $3,440 a tonne, its highest level since March 2018, but pared gains to trade at $3,405 by 1600 GMT.
Shanghai Futures Exchange's main November zinc contract closed up 1.5 percent at 24,000 yuan ($3,721.68) a ton, its highest level since November 2007.
Nyrstar's three smelters have a combined annual output of about 690,000 tonnes, Morgan Stanley said in a report.
Metal prices were also supported by a weaker DOLLAR, with the DOLLAR index falling 0.4 per cent.
LME aluminium was flat at $3,068 a tonne after hitting $3,118.50, its highest since July 2008.
Copper rose 2.2 per cent to $9,673 a tonne, lead rose 1.7 per cent to $2,248 a tonne, nickel fell 0.4 per cent to $18,905 and tin fell 0.2 per cent to $36,400 a tonne.
