Nyrstar to Slash Hobart Zinc Output by 25% Amid Market Pressures

Nyrstar

Weak treatment charges and tight zinc concentrate supply force production cuts at one of the world’s largest smelters.

Global metals producer Nyrstar will reduce zinc production by 25% at its Hobart smelter in Australia, beginning in April 2025, the company announced. The decision follows mounting financial losses triggered by deteriorating raw material markets, falling treatment charges, and rising operational costs.

Owned by Trafigura, Nyrstar said the cutback will be phased in over the coming months and will remain in place until market conditions improve.

Zinc Market Conditions Strain Independent Smelters

The Hobart smelter, which has an annual capacity of 280,000 tonnes, is among the largest zinc smelters globally. It primarily exports to Asia and operates in tandem with Nyrstar’s Port Pirie site, which produces lead, silver, and sulphuric acid.

The broader zinc smelting industry has struggled over the past 18 months, as zinc concentrate availability shrank following mine closures in 2023, caused by weak zinc prices. The benchmark zinc treatment charge dropped by 40% to $165/t last April, and smelters worry that 2025 benchmarks may fall further.

Concentrate Supply Yet to Recover Despite Mine Restarts

Although global mined zinc output is expected to recover in 2025 through mine restarts, concentrate supplies have not yet rebounded. Restarted mines will likely phase in production throughout the year, meaning smelters continue to face tight feedstock supply.

Still, zinc prices have shown recent strength. The LME three-month zinc contract climbed to $2,966/t, the highest level since 31 December. Despite this, smelter margins remain under pressure, prompting output reductions like Nyrstar’s.