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Zinc prices in London slipped on Tuesday, as higher inventories in exchange warehouses raised concerns over tepid demand despite prospects of disrupted supply amid an energy crisis.

Three-month zinc on the London Metal Exchange was down 0.7% at $3,420.50 a tonne, as of 0540 GMT, retreating from a six-week high scaled on Aug. 4, when major producer Glencore warned of output cuts due to high power prices.

On-warrant zinc stocks in LME warehouses rose to 40,950 tonnes, their highest since June 20 and the biggest daily jump since January 2021, with most immediately available stocks in Taiwan and Singapore warehouses, LME data showed.

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“Demand wanes in Western countries amid tighter monetary policies and soaring energy prices,” said ANZ analysts in a note.

“Those cost pressure could ultimately tighten markets, with further cutbacks in supply likely in coming months,” they added.

Slowing global growth has weighed on metals prices as less economic activities imply subdued demand.

An unexpectedly strong U.S. jobs data released on Friday also raised fears that the Federal Reserve would impose more aggressive rate hikes, which would further slow economic growth.

However, zinc inventories in ShFE warehouses were still at their lowest since Jan. 21 at 88,896 tonnes by Aug. 5, down 50% since March.

The most-traded September zinc contract on the Shanghai Futures Exchange was almost flat at 24,210 yuan ($3,583.38) a tonne.

LME copper fell 0.8% to $7,923.50 a tonne, lead declined 1.7% to $2,126.50 a tonne, tin lost 1% to $24,060 a tonne, ShFE copper rose 0.7% to 61,000 yuan a tonne and ShFE nickel dropped 2.2% to 167,670 yuan a tonne.

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($1 = 6.7562 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Sherry Jacob-Phillips)