Zinc prices surged to their highest level in more than four years on Friday, driven by mounting concerns over tightening supplies outside China and a wave of speculative buying that caught bearish traders off guard.

Benchmark zinc on the London Metal Exchange hit $3,823.85 a metric ton, its strongest level since June 2022.

The metal, primarily used to galvanise steel, has rallied about 22% year-to-date, outperforming every major LME metal except tin.

The rally reflects a stark regional divide in zinc inventories. Stocks in LME-registered warehouses have slid 25% over the past two months to 93,125 tons. In contrast, inventories at Shanghai Futures Exchange-linked facilities have more than doubled this year to 155,954 tons.

“Concerns over physical metal shortness have supported zinc’s price, with LME stocks relatively tight,” Macquarie analyst Alice Fox told Reuters.

The regional disparity widened further this week when 9,175 tons were delivered to LME warehouses in Hong Kong.

The price gains have been amplified by speculators who repeatedly bet on increased mine output, only to be forced into covering their positions.

“Zinc is still confounding the bears,” said Alastair Munro, senior base metals strategist at broker Marex. “Too many keep trying to pick tops amid the expectation of increased supply, which is then slower to materialise forcing them to stop out.”

The shortage of concentrate—partially processed ore from mines—has pushed treatment charges into record negative territory. Spot concentrate treatment charges, cif China, were last quoted at minus $110 a ton, compared with plus $100 in November last year.

The tightness outside China has created a large backwardation on the LME, where nearby futures trade at a premium to forward contracts. The premium of LME cash zinc over the three-month contract surged to $132 a ton on Friday, up from zero in early July and the highest since December.

“There is a risk of a prolonged squeeze with backwardation persisting and roll costs becoming more expensive,” Fox said.