SHANGHAI, Oct 14 (SMM) - Global energy crisis is still in the spotlight of the market. Nyrstar announced to cut the zinc output by 50% amid surging electricity prices, which is likely to reduce the actual output by 70,000 mt.
In China, the zinc output in October is likely to drop by 8,400 mt due to sustained power rationing in Guangxi and less production activities in Yunnan in the dry season.
The power rationing policy continues to impact the smelting production, while the market also worries over further output cut by the overseas smelters. As such, the near-term zinc prices are likely to stay firm with no chance of falling. The downstream demand has been suppressed by the power rationing policy and low profits.
he domestic social inventory of zinc ingots stood at 136,600 mt, a historical low in recent years. And the LME inventory has dropped by nearly 100,000 mt in the past six months to 191,000 mt.
However, the released national reserves will be a supplement to the market supply, and the overseas prices may outperform the domestic market.