Already high zinc prices are expected to now hit decadal highs, due to production cuts in the industry. CEO Sunil Duggal, after a strong Q1 performance by Hindustan Zinc, said he expects prices of the metal to rise significantly in the next two quarters, touching $3,000 per metric ton.
Prices of zinc have already risen approximately 22% over the last 12 months. A major reason has been drops in production in the industry, after mines in the United States, Australia and Ireland have closed, benefiting Hindustan Zinc which increased its output amid higher prices. In Q1 the company reported an 81% increase in net income to Rs. 1,880 crore.
Multiple mining companies are making use of the opportunity to expand production - Hindustan Zinc has a new mine opening in South Africa, while Iran is leveraging its rich Mehdiabad property signing a $1 billion deal to develop its zinc reserves. Peru is also emerging as a new player in the space. But for the next couple of quarters, the price for zinc is only expected to go up, as the market works to revive supply. Demand is predicted to outstrip supply through FY18, according to the industry body.