Nyrstar to cut output by 25% at Hobart zinc operations in Australia
The Hobart facility in Australia
The Hobart facility in Australia
LONDON - Nyrstar will cut production by 25% at its Hobart zinc operations in Australia from April, the company owned by commodity trader Trafigura said on Wednesday, sending prices higher.
"This decision follows a thorough and extensive review and is a direct response to deteriorating market conditions and financial losses being sustained by Nyrstar Australia," a statement said.
The zinc smelter in Hobart, which Nyrstar bills as one of the world's largest, has a capacity of about 260 000 metric tons a year, the company said in an email, without providing the latest output figures.
Nyrstar said its Australian assets are facing significant financial challenges due to worsening conditions in raw material markets, negative treatment charges, and increased costs.
"We remain optimistic about the future and have the flexibility to lift production levels when operating conditions improve” Hobart General Manager Todd Milne said.
Analysts expect a global market surplus of the metal mainly used for galvanizing steel this year of 147 000 tons partly due to the ramp up of new mines, according to a consensus forecast in a Reuters poll in January. MET/POLL
Benchmark zinc prices CMZN3 on the London Metal Exchange slumped last month to $2 706.50 a ton, their weakest in nearly four months before rebounding.
LME prices jumped on Wednesday following the news from Nyrstar, gaining 1.9% to $2 967 a ton by 1200 GMT, their highest in nearly three months. 
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