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Dutch zinc maker forced to slash production hours as energy costs surge

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Nyrstar is curtailing production at a major zinc smelter in the Netherlands during peak times of day in response to the surge in regional power prices, a company official said.

The zinc producer took the decision to dial back output at the plant in Budel-Dorplein after seeing a fourfold rise in power prices over the past year, said Henk Leendertse, the general manager at the smelter.

The plant was operating close to its capacity of about 300,000 tons-per-year before the cutbacks, he said.

Zinc prices were up 1.8pc in London after the news.

The cutbacks offer a fresh example of the drastic steps industrial companies across Europe are taking to insulate their businesses from the surge in power and gas prices.

The spike has far exceeded a rebound in industrial metals markets over the past year, pushing some producers into the red even as metal prices trade near multi-year highs.

“We have hedged a certain share of our electricity consumption, and that helps, but it’s only a matter of time,” Mr Leendertse said. “If we want to hedge for next year, prices are already sky high, so it only delays the impact.”

Nyrstar runs three smelters in Europe, as well as operations in Australia and the US. Its plants in France and Belgium are operating as normal, as power costs are lower there.

Budel-Dorplein, near the border with Belgium, accounts for 1pc of electricity consumption in the Netherlands, using about 3.8 megawatt-hours of power to produce a ton of zinc.

Nyrstar is in discussions with the Dutch government about potential support.

However, the plant is in a disadvantaged position relative to other smelters because the country has yet to confirm that it will continue to offer emissions-linked compensation available elsewhere in the EU.


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