November 2021
Zinc producers are currently facing numerous challenges to keeping a stable supply. Globally, there has been huge demand for energy as economies recover from the Covid-19 pandemic.

This, along with disruptions to the global power supply, has led to a global energy crisis, with energy prices skyrocketing, putting pressure on energy-intensive facilities such as smelters. An increased focus on greenhouse gas emissions reduction has put the spotlight on new green technologies to help countries meet reduction targets. This focus set to become more prevalent in November, with the 2021 United Nations Climate Change Conference (COP26) being held at the beginning of the month.

Global Energy Crisis


Following from smelter shutdowns in early 2021 due to a drought in the hydropower-rich Yunnan province, finished zinc supply in China is expected to be impacted again in the December quarter by the global energy crisis. China is experiencing rolling blackouts and energy rationing due to shortages of coal, putting limits on smelters, which use a large amount of energy. Production is expected to be disrupted until the end of the year, with the beginning of the northern hemisphere winter expected to compound the problem in the short term.


Europe is experiencing surging energy costs, with gas prices at record levels, due to a reduction in gas supply from Russia and a 20% reduction in output from the region’s wind power sector.

Nyrstar announced that, from the end of September, it would be cutting production by up to 50% at three of its European smelters, Budel in the Netherlands, Balen in Belgium, and Auby in France. Nyrstar plants are fully electrified, and the operations in the Netherlands and Belgium run on electricity predominantly generated from renewable power sources. Due to significant increases in the cost of electricity in recent weeks, and the cost burden of the carbon emitted by the electricity sector, which is passed on to industrial and domestic customers, it is no longer economically feasible to operate the plants at full capacity. It is not clear yet exactly how much the company’s zinc production will be reduced as a result of the production cutbacks, or when a return to full production is likely to occur.

Glencore followed Nyrstar’s lead, adjusting production at its European zinc smelters to reduce their exposure to peak price periods. Glencore operates the San Juan de Nieva smelter in Spain, which is one of the largest smelters in the world, so any impact to its production could have a significant effect on the supply chain. The Plovdiv zinc-lead smelter in Bulgaria, owned by KCM 2000 Group, has also halted production.