Zinc production at Nyrstar’s Budel smelting operations in the Netherlands will resume during the week of May 13, the company owned by commodity trader Trafigura announced on Tuesday. The decision to restart the smelter, which has a capacity to produce 315,000 metric tons per year, comes partly due to higher prices for the metal used to galvanize steel.
The Budel smelter was suspended in the second half of January, but Nyrstar said the decision to resume production “follows a thorough and comprehensive review and reflects recent improvements in market conditions and the temporary reinstatement of indirect cost compensation in the Netherlands that will help reduce Nyrstar Budel’s overall energy costs.”
Benchmark zinc on the London Metal Exchange (LME) hit $2,974 a ton on Tuesday, up 30% since the middle of February and the highest since March 2023. This increase in zinc prices appears to be a key factor in Nyrstar’s decision to restart production at the Budel smelter.
However, the company noted that the situation remains under constant review and Nyrstar continues to actively manage production capacity across its European operations to respond to the continued uncertain near-term market conditions. The Budel smelter has been operating on a flexible basis since the fourth quarter of 2021.
The restart of zinc production at the Budel smelter is a positive development for the global zinc market, as it will help increase supply and potentially ease any tightness in the market. Nyrstar’s decision reflects the ongoing volatility and uncertainty in the commodities sector, which is heavily influenced by various market and geopolitical factors.