Declining prices on the London Metal Exchange will take their toll on domestic zinc prices, which are likely to rule soft during the coming months, analysts predict. Moreover, factors like the global slowdown, over-supply and the ongoing recession will also contribute to the decreasing prices, they added.
India imports 25 per cent of its total estimated demand of 2.83 lakh tonne. Therefore, the shadow of the price trends on the London Metal Exchange impacts local prices, analysts said. International prices are ruling at $819 a tonne which is at its lowest in the last one decade, due to overproduction.
International players are already contemplating a production cut, market sources told Business Standard. They added that following the production cut in the international scenario, domestic zinc producers, including Hindustan Zinc and Binani Zinc, were also likely to cut their output.
Hindustan Zinc has a capacity of 1,52,000 tonne per annum while Binani Zinc