LME seeks to boost electronic trading, but guard physical deals
The measures attempt to navigate a recurring tension between traditional physical users and the financial community which prefers electronic trading.
Russia’s new Ozernoye plant, located next to the country’s largest zinc mine, launched zinc concentrate production on Wednesday, the company said, after delays caused by a 2023 fire and US sanctions.
Ozernoye, situated in a remote area about 200 km (124 miles) from the border with Mongolia, aims to process up to 6 million tons of zinc ore with output volumes of up to 600,000 tons of zinc concentrate when it reaches full capacity in 2025.
Sanctions imposed in 2023 on Ozernoye’s owner, metals magnate Vladislav Sviblov, and his companies by Washington and London complicated the search to replace Western equipment that was destroyed in the blaze.
The company said on Wednesday that it had relied on domestic technology to replace the equipment.
The launch of Ozernoye is expected to help ease tight global supply of zinc concentrate which is being felt in top consumer China this year with global mine production heading for a third consecutive year of decline.
Despite tight supply of the raw material, the global refind zinc market is currently in surplus however. Zinc is used to galvanise steel with the construction sector being the main market.
Analysts at Macquarie expect the global surplus of refined zinc to grow in 2025 as both mine supply and smelter production increase.
Ozernoye said that demand for its concentrate from buyers in the Asia region was sufficient.
“Countries in the Asia-Pacific region are strategic markets for our products. The capacity of these markets is sufficient for product sales. There is interest in the concentrate from major buyers,” a company representative said.
He did not specify which other markets, apart from China, it was targeting.
(Reporting by Anastasia Lyrchikova in Moscow Аdditional reporting by Polina Devitt in London. Writing by Gleb BryanskiEditing by Andrew Osborn)
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