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Glencore has already suspended production at one of its zinc smelters in Europe, leading to a sharp drop in its metal output this year, and on Thursday it disclosed that its other smelters in the region are barely turning a profit.

The company produced 350,900 tonnes of zinc in H1, 47,500 tonnes (12%) lower than H1 2021, mainly relating to the suspension of Portovesme’s zinc line in Q4 2021, due to high European power prices.

While risks to industrial-metals demand are mounting, Europe’s power crisis is also weighing heavily on the supply outlook, the company said.

Zinc surged as much as 8.5%, the biggest intraday gain since March 8, finishing the day up 4.4% at $3,420, the strongest since June 28.

“On the supply side, the current energy supply and price environment pose a significant threat, as Europe accounts for around 30% of ex-China metal production,” Glencore said in its half-year earnings report.

“Most fundamental indicators continue to point to tight market conditions, particularly in the West.”