LONDON- Zinc prices held firm on Tuesday supported by worries about shortages, particularly in Europe, where record-high power prices have led to large production cuts and dwindling inventories.

Benchmark zinc on the London Metal Exchange was up 0.1% at $4,293 a tonne at 1047 GMT. Prices of the metal, used to galvanise steel, hit a record high of $4,896 a tonne last month.

"There are serious shortages of zinc in Europe, this will remain the case as long as power prices remain high," a zinc trader said. "Deficits mean consumers have had to turn to inventories, which are falling rapidly."

Before power prices started rising last year, and energy accounted for about 40%-50% of zinc production costs in Europe.

INVENTORIES: Zinc stocks in LME registered warehouses at 120,825 tonnes are at their lowest since June 2020 and down more than 40% since December.

Cancelled warrants—metal earmarked for delivery—at 62% suggest another 74,900 tonnes is due to leave the LME system over coming days. Much of the zinc still available to the market is in Port Klang Malaysia and in Singapore.

Large holdings of zinc warrants and cash contracts <0#LME-WHC> have also added to nervousness about the availability of zinc supplies.

Concern about a lack of inventory to plug the gap between demand and supply has created a premium for cash over the three-month contract last at $43 a tonne.

Of the 500 tonnes of zinc stored in LME warehouse in Europe, only 25 tonnes are available to the market.

CHINA: Clues to demand for industrial metals in top consumer China will come from data on trade, house prices and industrial production, GDP and investment over the next couple of weeks.

OTHER METALS: Copper was up 0.5% at $10,249 a tonne, aluminium was down 0.4% at $3,235, lead gained 0.7% to $2,398, tin was flat at $43,379 and nickel added 0.4% to $32,630.

(Reporting by Pratima Desai; Editing by Amy Caren Daniel)