India: HZL cuts zinc benchmark despite firm global market

• Zinc spot prices stay INR 2,600/t above HZL benchmark
• HZL raises benchmark lead price by INR 900/t 

Hindustan Zinc Ltd (HZL) reduced its benchmark Special High-Grade (SHG) zinc ingot price by INR 6,000/t on 14 September to INR 431,400/t, despite firm international zinc prices and declining London Metal Exchange (LME) stocks. HZL, however, raised its lead benchmark by INR 900/t to INR 213,100/t.

BigMint assessed SHG zinc at INR 434,000/t ex-Delhi on 14 September, leaving the domestic market assessment INR 2,600/t above HZL’s revised benchmark.

Global market remains supportive

The latest domestic price reduction contrasts with strong international zinc market fundamentals. LME zinc cash settlement stood at $4,015/t on 11 September, while the three-month contract was at $3,872/t.

LME zinc stocks declined to 109,575 t from 111,350 t on 10 September. The continued drawdown in exchange inventories indicates tighter available stocks and has provided underlying support to zinc prices.

LME zinc has remained above the $4,000/t mark and reached its highest level in more than four years. A weaker US dollar and improving sentiment across the broader base-metals complex have also supported market sentiment.

Domestic pricing diverges from global cues

Despite the firm global backdrop, HZL’s latest INR 6,000/t reduction signals a downward adjustment in domestic benchmark pricing. The gap between HZL’s revised benchmark and BigMint’s assessment suggests that physical market levels remain comparatively firm.

Elevated LME prices and lower exchange stocks continue to provide support to domestic replacement costs. However, the latest HZL revision indicates that global strength has not translated fully into domestic benchmark pricing.

Outlook

Domestic zinc prices are likely to remain supported by elevated LME levels and declining exchange stocks, while HZL’s pricing decisions may continue to influence domestic market direction. The gap between the producer benchmark and physical market assessment will remain an important indicator of domestic price sentiment in the coming sessions.