Hindustan Zinc Ltd., the largest zinc producer and silver producer in India, SMM7, 23 / PRNewswire-Asianet /- Shares soared as much as 13% on Wednesday, the biggest intraday gain since October 2016.
Deputy CEO Arun Misra told analysts Tuesday that the company's silver production has more than quadrupled in the past decade to more than 600 tons, or about 13% of total revenue.
On Tuesday, Hindustan Zinc reported that second-quarter profit fell 23% to 13.6 billion rupees ($182 million) as falling prices and blockades to contain the virus affected production.
India's major zinc consumers, including steel mills, are gradually increasing production and demand is expected to improve by the end of the third quarter as a result of further deregulation, Misra said. In addition, as infrastructure activity is expected to accelerate, the government's series of economic plans to restart the economy will also contribute to the recovery of downstream demand.
Billionaire Anil Agarwal's Indian zinc division plans to increase silver production to more than 1000 tons over the next few years by increasing production of existing and new silver-rich deposits and improving process recovery. "this will pave the way for us to become one of the three largest silver producers in the world," he said. "
With another outbreak, a weak dollar and negative real interest rates in the US, investors are pouring into silver because of strong demand. Silver prices are up about 15% this week, driven by supply concerns and optimism about expected growth in industrial demand. Spot silver rose 7.2% to $22.8366 an ounce on Wednesday, the highest since 2013.
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