Shanghai zinc futures rose by their 4 percent daily limit on Friday after the metal surged almost 9 percent in London overnight, spurred by the prospect of power shortages this summer in China that could curtail output.
Analysts said Shanghai prices jumped in the afternoon to catch up with price moves in London, although some also noted rumours that China's top smelters may agree at a meeting over the weekend to cut output in order to support prices.
Shanghai's most-active September contract rose to 15,805 yuan ($2,312) a tonne, up 4 percent from the settlement price on Thursday, while LME zinc had fallen $14 to $1,970 a tonne as of 0800 GMT. The Shanghai three-month zinc price has dropped by 40 percent over the past 12 months and has been hovering for some time below the production cost for several small mills.
Aluminium for delivery in three months touched an all-time high of $3,380 per tonne on the LME on Thursday, triggered by a decision by China's top 20 smelters to cut output by 5 to 10 percent from July as China faces a power supply crunch over the summer.
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