SHANGHAI, Oct 14 (SMM) – SHFE Zinc Index rose 7.98%, with open interest increasing by 15,000 lots to 220,500 lots. Three smelters of Nyrstar in Europe will cut 50% of zinc output amid rising power costs, and the total capacity of the three smelters stood at 700,000 mt/year.
Guangxi is still subject to power rationing. The refined zinc output is expected to fall 8,400 mt MoM to 503,500 mt in October, down 11.55% YoY. The accumulative output fell 1.4% YoY in January-October.
Zinc ingot stocks across LME-listed warehouses stood at 191,000 mt, which have declined nearly 100,000 mt in the past six months. Social inventory of zinc across seven markets stood at 136,600 mt, which is at a low level over the same period of the year. The downstream restocking is not high at the moment amid power rationing and sluggish profits. Zinc prices are likely to trend higher due to the market sentiment.