Zinc (ZINC) futures contracts are trading up 4% today in response to reports from Dutch commodity company Nyrstar, which intends to temporarily shut down zinc production at two mines due to unprofitable output. The company cited low prices and the negative impact of inflation in justifying its decision on shutdown.
- On November 30, the company will temporarily halt production at Middle Tennessee Mines (two underground zinc mines, Gordonsville and Cumberland). It didnn't disclosed production figures for the two mines but the Tennesee plant has a processing capacity of 3 million tons of ore and 50,000 tons of concentrates per year.
- During the closure of the mines, the company intends to drill to discover additional germanium and gallium resources. Zinc prices quoted on London's LME have been under pressure since the beginning of the year. This summer, the company reported that it intends to take an interest in exploring both raw materials in a bid to respond to the shortage of materials used in chip production created by Chinese export controls.
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ZINC contract prices today managed to break above the 38.2 retracement of the May 2023 upward wave, and are currently still struggling to stay above the important support near $2,500. Potentially, a renewed drop below $2,400 could mean a bearish scenario of a breakout from the bearish flag pattern materializing. Source: xStation5
Increases in zinc futures prices accelerated today at a time when we saw stronger declines on US Dollar Index (USDIDX), The dollar is today under pressure from falling yields on 10-year US Treasury bonds. Source: xStation5
