Zinc prices will continue to trade at elevated levels as increasing energy and raw material costs curb production at some smelters and demand grows, according to India’s biggest producer.
High power prices could leave some smelters unable to operate, Arun Misra, chief executive officer of Hindustan Zinc Ltd., said in an interview with Bloomberg TV last week.
In the meantime, “demand for zinc has to go up as more and more governments across the globe are putting focus on the basics of politics –which is on infrastructure, roads, railways and bridges,” Misra said. The metal is used to galvanize steel, which is the backbone of construction.
Base metals have had a spectacular start to 2022, with the London Metal Exchange’s LMEX index rising to a record last week amid tight supplies and higher energy costs. The three-month zinc contract is up nearly 40 per cent in the past year to $ 3,575 a tonne. Companies like Hindustan Zinc are trying to cut costs by curbing usage of coal, a key input.
“As coal prices go up, we need to move away from coal and rely more and more on renewable sources,” said Misra, who is also chairman of the International Zinc Association. Hindustan Zinc aims to move entirely to renewable sources for its power consumption by 2030, he said. The company has earmarked $1 billion over the next five years to make its products greener, he said.