Zinc smelter NYRSTAR expands the scale of production reduction Zinc Price faces upward [Agency Review]

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The scale of Nyrstar production reduction in European zinc smelting enterprises has been expanded. Auby, a French smelter owned by Nyrstar, will stop production for maintenance in the first week of January 2022. Earlier, Nyrstar had cut production at its three zinc smelters in Europe by 50 per cent.

Under the high electricity price, the disturbance of refined zinc supply in Europe may continue. As we analyzed in previous comments, the energy shortage in Europe is difficult to solve in the short term, zinc smelting profits continue to be eroded by rising electricity prices, and the supply of refined zinc in Europe will continue to be disturbed to a large extent under the pattern of high concentration.

Supply disruptions further tighten the global balance of refined zinc. Globally, current expectations are basically close to equilibrium. Under the background of continuous disturbance of smelting supply in Europe, supply is expected to contract further. Under stable demand, the balance of refined zinc Synchronize is tightened, and the center of gravity of zinc price is expected to move upward.

Investment advice: pay attention to zinc enterprises with resource advantages, it is recommended to pay attention to: Chihong zinc and germanium, Zhongjin Lingnan.

Risk tips: short-term relief of overseas fossil energy problems; rapid increase in clean energy generation; and rapid decline in demand for refined zinc.