Zinc prices will remain in range between $3,100 and $3,300 per ton, says Hindustan Zinc CEO


September 23

Zinc prices are expected to remain in the range at a “rewarding” level of $3,100-$3,300 per ton for the immediate future on the back of strong demand from the automotive sector, both in India and overseas – mainly on the European market,” said Arun Misra, CEO of Vedanta. -belonging Hindustan Zinc Ltdand also President of the International Zinc Association (IZA).

According to him, foundries across Europe are cutting production due to “crippling” high energy prices. Additionally, larger zinc producers like Nyrstar – the Netherlands-based company and the world’s largest zinc producer – have suspended production until further notice.

The big European steel producers are also leaving their blast furnaces idle.

“As a result, there is some demand from these markets – such as in the automotive sector, where galvanized steel offerings would need zinc. There is a good opportunity to serve these markets. Nyrstar, there is demand that the major exporters would target, so prices are firming up from $4,000 per tonne to around $3,100 per tonne and are in the range of 3,100 to 3,200 $ per ton segment. And we wouldn’t be surprised if they hit $3,300 per ton in December,” he said. Activity area in an interview.

In India, we are witnessing a strong recovery in demand from the automotive sector with a further increase in orders. Galvanizing railway lines has the potential to generate additional consumption here.

“It’s the apartments – galvanized offers – that are pushing the numbers up and there’s excitement. Holiday season bookings have been good. The galvanizing of railway lines has not yet taken off. If that happens, another additional demand of 50,000 to 60,000 tonnes is expected in India,” Misra added.

“Overall, zinc consumption is expected to increase by 2.5-3% per year, it is assumed, compared to a previous forecast of 5%. “India is expected to experience around 3% growth in zinc consumption. The advice here does not change,” he said.

Availability of coal in India

Misra’s Hindustan Zinc is the largest supplier with a 75-85% market share; the rest is supplied by imports from countries such as Korea.

According to him, a scenario of improved power generation here – which in turn leads to better availability of coal for the company’s smelters – is seen as positive. “Liaison engagements have improved and supplies from Coal India are regularized. From one to two rakes of coal, the numbers are now up 9 to 10 rakes, which bodes well for us,” he said.

The company has “high-cost imported coal” in its inventory that it will blend with “relatively lower-cost” domestic coal – prices are at least 10-15% lower – to manage costs.

“We will produce over one million tonnes of zinc this year, in line with our FY23 guidance. The cost pressures are there. But prices remain remunerative,” Misra said.

Published on

September 24, 2022


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