Zinc prices are expected to remain range-bound at a “remunerative” USD 3,100 – 3,300 per tonne following the immediate strong future demand from the auto sector, both in India and overseas – chiefly in the European market, reported Arun Misra, CEO of Vedanta-owned Hindustan Zinc Ltd, and Chairman of International Zinc Association (IZA).

He stated that European smelters are cutting back their production amid the ‘crippling’ high energy prices. Moreover, zinc producer giant Nyrstar – the Netherlands-based company and the world’s biggest zinc producer – has halted the production output till further notice.

During an interview with Businessline, he stated that, due to big European steel producer idling, there is some demand from these markets – like in the auto sector, where galvanized steel offerings would require zinc for its production.

Serving in those markets could be a good opportunity. As Nyrstar is cutting back its production, there is demand that larger exporters target. As a result, prices which fell from USD 4,000 per tonne to around USD 3100 per tonne, are firming up. They are range bound in USD 3,100 – 3,200 per tonne segment. And there’d be no surprise if the prices would touch the price of USD 3,300 per tonne in December.

Misra added that in India, there is a strong demand recovery from the auto sector, with orders rising again. Also, in India, the Galvanisation of railway lines has not yet taken off, in case if it happens, it might lead to another 50,000 – 60,000 tonnes of additional demand. Further, he also reported that overall, zinc consumption is expected to increase by 2.5 – 3 per cent annually.