Hindustan Zinc sees cost of production falling further amid volatile global prices

Mining major Hindustan Zinc expects to further lower its cost of production by $25-30 per tonne as coal prices continue to soften, offering some cushion against a volatile global pricing environment, Chief Financial Officer Sandeep Modi told analysts during the post-earnings briefing on April 25.

The world's largest integrated zinc producer remains bullish on international prices going ahead, expecting them to be around $2,800-2,900 per tonne during FY26.

Zinc prices have fallen 10.5 per cent in the past one year, partly under pressure due to a combination of rising supplies and weak demand.  The metal is heavy used in the construction sector, which is facing a global slowdown, along with broader uncertainty over due to US tariff policies, which have together dampened sentiment.

Asked if ongoing cost-saving measures could offset the negative impact of lower LME prices, Hindustan Zinc said a major portion of its fixed costs are one-time in nature, while its variable costs - linked to commodities like coal, met coke, and diesel - are starting to ease, creating room for further cost efficiencies. Sandeep Modi said Hindustan Zinc is already benefitting from a fall in coal prices, although the full benefits of lower diesel prices are yet to be realized.