Import spot TCs increased in August, after three consecutive months of declines from April- July. The increased terms reflect the Chinese smelters’ falling demand for imported material during the month, as the LME-SHFE zinc price arbitrage once again closed. The arbitrage between zinc’s LME and SHFE price moved further into negative territory due to the former improving more significantly during the first half of August. During the period, LME zinc prices continued the upward momentum seen at the end of July, partly reflecting optimism that surrounded interest rate pauses, flooding in China resulting in production curtailments and the deepening energy crisis in Europe. The continued elevation in electricity prices in Europe is likely to be the primary cause for Nyrstar announcing on 16 August that it will place its Budel smelter on care and maintenance from 1 September.
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