Zinc Gains As Glencore-Backed Peru Miner Volcan Halts Three Mines Over Permits

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Zinc Gains As Glencore-Backed Peru Miner Volcan Halts Three Mines Over Permits

Zinc prices saw a modest increase of 0.34% yesterday, settling at 218.7 rupees, as Peruvian zinc miner Volcan, backed by Glencore (LON: GLEN ) Plc, announced a temporary halt in operations at three of its mines in Peru. This decision comes as the company works on updating an operating permit for its Rumichaca tailings dam. The affected mines include San Cristobal, Carahuacra, and Ticlio, located in the central region of the country, with operations expected to be suspended for up to 30 days. The global zinc market shifted to a surplus of 58,700 metric tons in January, reversing from a deficit of 46,800 tons the previous month, according to data from the International Lead and Zinc Study Group (ILZSG). This surplus contrasts with January 2023 when the market reported a surplus of 54,000 tons. 

Glencore recently initiated the ramp-up of production at its Nordenham zinc smelter in Germany, which had been under care and maintenance for over a year. The resumption of operations at Nordenham is significant, considering its annual production capacity of about 165,000 tonnes of zinc and zinc alloys. Meanwhile, the People's Bank of China opted to keep lending rates unchanged at the March fixing, in line with expectations. The one-year loan prime rate (LPR), a key benchmark for corporate and household loans, remained steady at 3.45%. This decision reflects the central bank's stance amid evolving economic conditions and its efforts to maintain stability in the financial sector. 

From a technical standpoint, the zinc market observed short covering, with a notable drop in open interest by -13.54% alongside a marginal price increase of 0.75 rupees. Currently, zinc finds support at 217.8 rupees, with potential downside testing at 216.9 rupees. Resistance levels are anticipated at 219.5 rupees, with a breakout potentially leading to prices testing 220.3 rupees.

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