LME Zinc Prices Surge as Nyrstar Cuts Production, Market Eyes $3,000 Mark

London Metal Exchange (LME) zinc futures climbed nearly 3% last week, closing at $2,972.5 per metric ton, as supply concerns intensified following a planned production cut by Nyrstar, one of the world’s largest zinc smelters.

Nyrstar announced it will reduce output at its Hobart zinc smelter in Australia by 25% starting in April 2025. The facility, which has an annual production capacity of 260,000 metric tons, is scaling back due to challenging raw material market conditions, high processing fees, and rising operational costs.

Market analysts expect zinc prices to remain strong in the coming weeks, with China’s peak demand season approaching. Some forecasts suggest that prices could surpass the $3,000 threshold in the near term, particularly as supply tightens.

Meanwhile, LME-monitored zinc inventories declined by 825 metric tons on March 14, bringing total stocks down to 159,500 metric tons. While elevated prices could dampen demand from downstream buyers, the combination of constrained supply and seasonal demand growth in China is expected to keep prices elevated.