Affected by soaring energy prices and pressure to cut carbon emissions, smelters reduced production and metal prices soared to multi-year highs.

Specifically, London base metals rose across the board on Thursday, with LME copper up 3.62 per cent at $10000 per tonne, LME zinc up 3.76 per cent at $3529.5 per tonne, LME nickel up 2.42 per cent at $19375 per tonne, LME aluminum up 2.31 per cent at $3139 per tonne, LME tin up 2.13 per cent at $37160 per tonne and LME lead up 2.43 per cent at $2300 per tonne.

Copper prices are heading for record highs as commodity traders pull out of oil, according to technical analysis conducted by Bank of America. "We think the commodity market is turning to reducing oil bulls in exchange for copper bulls," wrote Paul Ciana, a technology strategist at Bank of America Corporation. "

Supply chain bottlenecks and labour shortages caused by the outbreak have pushed LME copper prices up 29 per cent this year. These increases lagged behind the 63 per cent increase in ICE oil.

Ciana said there had been some "correction patterns and signals" in oil prices recently. There is a lack of buyers for crude oil above $80, suggesting that bulls are hesitant. He expected oil prices to fall to support in the $76.50 region, but warned that oil prices could fall back further to the $65-$68 range.

At the same time, higher commodity prices could lead to greater inflationary pressures as energy shortages push up electricity and natural gas costs, and metal supply cuts are spreading to Europe.

On Wednesday, Nyrstar, the world's second-largest zinc producer, said it would cut production at three European smelters by up to 50 per cent, causing zinc prices to soar to their highest level since 2007. Belgium-based Nyrstar said on Wednesday that rising energy bills and additional costs imposed by the EU on carbon emissions meant it was "no longer economically feasible" to operate the three plants at full speed in the Netherlands, Belgium and France.

Metal production is the latest area of the global economy to be affected by soaring natural gas prices. Soaring natural gas prices are pushing up energy costs for manufacturers. Natural gas stocks have dwindled, while concerns about cold winters in the northern hemisphere are prompting fierce competition among buyers in Europe, Asia and North America to replenish inventories.

For metals, a shortage of natural gas means less production when demand is strong. Demand for zinc for steelmaking is strong as economies around the world reopen from the blockade triggered by the coronavirus. Demand for aluminium used in food packaging, cars and construction has also rebounded.

A weaker dollar has also supported this week's dollar-denominated metals, making them cheaper for overseas buyers. But looking ahead, not everyone believes that the future of copper is optimistic.

The International Monetary Fund (imf) has expressed concern that the global economic recovery is losing momentum and is increasingly polarizing. Copper prices rose sharply in May, driven by the global economic recovery. Citigroup Inc, one of the biggest bulls on copper this year, said recently that copper prices could fall by another 10% and demand would shrink in the next three months.