Hindustan Zinc sees weak June quarter, recovery may take some more time

Volume and costs are expected to improve going forward, but trade war concerns might keep base metal and stock prices volatile in the near term

Hindustan Zinc, India's largest domestic zinc producer which has been aggressively eyeing volume expansion, saw an unusually weak June quarter, impacted mainly by a change in mining plan and lower base metal prices.

The company changed its mining plan and increased production from underground mines, while open-cast mines saw closure, pushing down total mined metal production by 9 per cent on a year-on-year basis and 17 per cent sequentially. As a result, the fixed costs were spread over lower production; this, along with higher coal prices and wages, meant an increase in per-tonne costs and impacted profitability.

The cost of production before