Two major producers, Nyrstar NV (NYR.BT) and Mitsui Mining & Smelting Co. (5706.TO), confirmed they had increased their charges for buyers such as steel manufacturers in the face of strong end-demand, tight supply and similar industry-wide price increases.

Supplies of zinc--which can be used to coat steel to protect it from corrosion--have been rapidly declining. The global refined zinc market was undersupplied by 18,000 metric tons in the first 11 months of 2013, according to the International Lead and Zinc Study Group, an intergovernmental organization. This compares with a surplus of 179,000 tons in the same period of 2012.

Mining companies are shutting down zinc-output facilities in mining hubs such as Canada and Australia because reserves in those mines have largely been depleted. Prices on the London Metal Exchange closed Friday at $2,022 a ton, up 1.3% from the day earlier. It has risen around 7% since the start of December.

"Zinc has recovered particularly impressively; we are not alone in favoring this metal," said BNP Paribas analyst Stephen Briggs.

Commonwealth Bank analyst Lachlan Shaw said prices had surpassed his expectations in 2014 to-date, while analysts at Commerzbank forecast prices to reach $2,100 a ton by the end of the year.

Premiums--charges on top of the London Metal Exchange price for delivery of special high-grade zinc--have risen to around $180-$200 a metric ton this year, from $120-$130 a ton last year, a gain of nearly 70%.

A spokeswoman for Nyrstar, one of the world's largest producers of zinc, said their increase to customers has been in line with these rises, without giving an exact figure.

"We have seen charges for special high-grade zinc--what we call premiums--increase across the industry in 2014, and, as a result, Nyrstar has and will continue to follow market trends," the spokeswoman told The Wall Street Journal.

Japan's biggest producer, Mitsui Mining & Smelting, has also raised its zinc premiums for 2014 by around 70%, underpinned by rising demand, a spokesman said. Mitsui largely exports to Taiwan and China, the world's largest consumer of the metal.

Chinese demand for the material has been strengthening, as the world's No. 2 economy invests in new infrastructure such as airports and rail lines. Imports of refined zinc into the country rose more than a fifth in 2013, according to customs data.

Zinc is resistant to rust, so it is used to coat steel for making lampposts, car doors and beams. It also is combined with copper to make brass.

Stockpiles of the metal held in LME warehouses currently stand at 828,575 tons, down 32% since the start of 2013.

Glencore Xstrata PLC's (GLNCY, GLEN.LN, 0805.HK) Brunswick and Perseverance mines in eastern Canada, which produced a combined 335,000 tons of zinc in 2011, closed last year. Output from MMG Ltd.'s Century mine in Australia's Queensland state is also slowing, with the world's third-biggest open-pit zinc mine slated for closure by 2016. MMG previously estimated Century's output to fall about 5% in 2013.

Analysts and investors say the supply shortfall will continue to support prices in the $15 billion zinc market, a rare bright spot for commodities bulls. They consider many raw-materials markets, from coal to corn, to be oversupplied, a situation that has broadly weighed on commodity prices.

--Mari Iwata contributed to this article.

Write to Francesca Freeman at francesca.freeman@wsj.com and Rhiannon Hoyle at rhiannon.hoyle@wsj.com

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(END) Dow Jones Newswires

February 07, 2014 18:29 ET (23:29 GMT)