Zinc prices fell on Tuesday amid concerns that smelters could increase supply amid rising processing costs, while prices for copper and other base metals rose after the dollar fell.
Zinc prices in London fell 0.8 percent to $ 2883 a tonne at 04:16 GMT, and the most active zinc contract on the Shanghai Futures Exchange fell 1.6 percent to 22,710 yuan ($ 3,382.53 ) per ton.
Market participants are concerned that finished zinc supply will rise after smelters and miners agree to skyrocket finishing and refining costs. For Chinese smelters, these costs rose to RMB 6,350 (US $ 945.83) per tonne for domestic concentrate from RMB 3,500 in early 2018.
“The current profit for metallurgical enterprises is very high. This will push the smelters to increase utilization rates, ”said Dina Yu, a CRU metals analyst in Beijing, adding that Chinese smelters are making a profit of 3,000 yuan ($ 44,685) per ton, a record high >
The general base metals market traded higher after the dollar fell for the second day in a row against a basket of major currencies. Dollar base metals are trending higher as they are cheaper for buyers paying in other currencies.
