Zinc prices up 4% on supply concerns
Hindustan Zinc revises ingot prices upwards
Zinc – the fourth most consumed metal globally after iron, aluminium and copper – is witnessing an upswing with a four per cent week-on-week increase in global prices.
There has been a similar hike in India, too.Lower stock positions across London Metal Exchange (LME) warehouses continue to be among the prime reasons which have led to a northbound price movement of the non-ferrous metal. European mills are also managing consumption as high energy prices continue to be a concern there.
Zinc cash prices in the LME were at $3,896 per tonne up four per cent (June 1 vs May 25), and the three-month contract price was up over three per cent between May 25 and June 1 to $3,864.50 per tonne.
Supply concerns continue, because of which zinc output has been lower than expected in the January to March quarter.
In fact, Glencore, the world’s largest zinc miner, in a report, said its own source zinc production fell 15 per cent (41,000 tonnes) y-o-y to 241,500 tonnes reflecting Mount Isa Covid-19 absenteeism (21,300 tonnes) and the planning mining cessation of Iscaycruz in Peru in Q32021 (20,300 tonnes).
Production cuts
“There is no supply shortage of zinc, but production cuts by major players in Q1 and concerns over energy costs have led to stock issues that have led to prices turning volatile,” a trade source said.
China opening up would lead to some boost in sentiments too. But, the immediate ramp-up of production across major zinc miners is ruled out in the short run.
According to Rahul Sharma, Director -India, International Zinc Association, geopolitical issues continue to have an impact leading to high volatility in prices. “Long term corrections are evident. But at the moment, there will be some volatility which will continue through the short term,” he told BusinessLine.
Zinc prices have been pretty volatile all through May as per the LME benchmark.
Indian prices
In India, the country’s largest zinc producer, Hindustan Zinc – a Vedanta subsidiary – has raised prices of special high-grade zinc ingot prices by four percent-odd across Jodhpur auctions to approximately $4,558 per tonne on June 2 versus $4,378 in May.
According to company officials, prices are indexed as per the LME and this has led to the change. Indian zinc prices are higher than global prices.
Zinc prices up 4% on supply concerns - The Hindu BusinessLine
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