India: HZL raises zinc benchmark despite weaker LME prices

• LME zinc three-month prices fall to $3,733/t on elevated stocks
• HZL’s refined lead production rises 14% y-o-y to 51,000 t in Q2

Hindustan Zinc Ltd (HZL) raised its benchmark Special High-Grade (SHG) zinc ingot price by INR 14,000/t in its latest revision to INR 423,700/t. The company also increased its lead benchmark by INR 3,700/t to INR 215,200/t.

BigMint’s latest SHG zinc assessment stood at INR 437,000/t ex-Delhi on 2 October, remaining INR 13,300/t above HZL’s latest benchmark.

Global zinc market weakens

LME zinc three-month prices declined to $3,733/t and cash settlement to $3,798/t on 2 October, compared with $3,842/t and $3,954/t, respectively, on 30 September. Zinc stocks stood at 123,750 t, up from 121,600 t over the same period.

The continued decline in zinc prices comes alongside elevated exchange inventories, which could weigh on international market sentiment.

LME lead three-month prices declined to $1,865/t and cash settlement to $1,827/t on 2 October from $1,890/t and $1,856/t, respectively, on 30 September. Lead stocks declined to 354,175 t from 357,350 t over the same period.

Domestic benchmarks move higher

HZL’s latest revision follows an increase of INR 14,000/t in zinc and INR 3,700/t in lead, taking its benchmarks to INR 423,700/t and INR 215,200/t, respectively.

BigMint’s assessment of spot zinc prices remains INR 13,300/t above HZL’s latest benchmark, although the gap has narrowed from INR 14,300/t previously. The increase in HZL’s benchmark comes despite continued weakness in LME zinc prices.

Hindustan Zinc reports stronger Q2 production

Hindustan Zinc reported a 5% YoY increase in mined metal production to 271 kt in Q2, while saleable metal production rose 7% YoY to 264 kt.

Refined zinc production increased 5% YoY to 212 kt, while refined lead production rose 14% YoY to 51 kt, indicating stronger refined metal output during the quarter.

Outlook

Domestic zinc prices will likely track HZL’s revised benchmark, LME movements and exchange inventory trends. The gap between HZL’s benchmark and BigMint’s physical assessment, along with the continued rise in LME zinc stocks, will remain key indicators for domestic price movements.