Glencore Q3 zinc output up 13 pct M/M, first rise after cuts

By Eric Onstad

LONDON, Nov 3 (Reuters) - Glencore (Frankfurt: 8GC.F - news) third quarter zinc production rose 13 percent from the previous quarter, the first time quarterly output has increased since the group announced sweeping mine suspensions to boost prices, a production report showed on Thursday.

Some metal investors have worried that the reversal of Glencore's output cuts would dampen a rally in zinc, the top performer among base metals with gains of over 50 percent so far this year.

Investors have piled into the market on expectations of severe shortages emerging due to the Glencore suspensions as well as major mines such as Century (KSE: 002420.KS - news) in Australia running out of ore and closing down.

Glencore has declined to say when it plans to fully resume production at mines it had mothballed in an effort to boost prices, which hit multi-year lows in January.

"The company is starting to reap the benefits of its supply discipline. The zinc price is up 54 percent since the start of the year and Glencore has started to slowly resume production," said analyst Paul Gait at Bernstein.

Glencore's production data released on Thursday show zinc production from its own sources rose to 282,700 tonnes in the third quarter from 249,400 tonnes in the previous quarter.

Output for the nine months, however, is down 30 percent from the same period last year, reflecting the cuts that took place in October last year, when Glencore slashed 500,000 tonnes of annual zinc production. (Reporting by Eric Onstad, editing by David Evans)