Zinc prices gained 1.14% at closing to close at 225.6, fueled by important industry developments. Nyrstar’s announcement that it would discontinue its Budel zinc smelting operations in the Netherlands in the second half of the month due to high energy costs and difficult market conditions had an impact on market sentiment.
The choice to place the operations on “care or maintenance” denotes a stop to output with the option of a future reopening while allowing for continued maintenance. With a yearly capacity of 315,000 metric tonnes, Budel zinc Smelter has been running on a flexible schedule since Q4 2021.
Changes in supply dynamics are reflect in the notable 15.2% increase in zinc inventories from the previous Friday in warehouses under the supervision of Shanghai Futures Exchange.
The latest data indicates that China’s exports in December were higher than expected, which points to a steady improvement in trade terms. According to International Lead and Zinc Study Group (ILZSG), the global zinc market deficit decreased to 52,500 metric tonnes in October from a deficit of 62,000 tonnes in September.
According to ILZSG data, there was a surplus of 295,000 tonnes in the first ten months of 2023 as opposed to a deficit of 33,000 tonnes in the same period in 2022.
Technically, there was new buying in the zinc market, as open interest increased significantly by 15.17% to settle at 2854. Zinc finds support at 223.6, with a potential test at 221.5, despite a rise of 2.55 rupees. Zinc Prices may test 229.1 if resistance is overcome, which is anticipat at 227.4.