Trafigura Group is conducting a strategic evaluation of its underperforming Nyrstar zinc and lead smelting facilities in Australia. CEO Richard Holtum emphasized the importance of government support due to the national security implications of smelting capacity. Despite concerns about China's dominance in mineral supply chains, metals processing plants globally are facing financial challenges due to intensifying competition and high costs. The imbalance between supply and demand has led to smelters having to pay for processing ore, as indicated by negative spot treatment charges since the second half of 2024.

Trafigura, through its majority ownership of Nyrstar, operates a primary zinc smelter in Hobart and a lead smelter in Port Pirie in Australia. With approximately 1,300 employees, these operations are struggling to compete with Chinese rivals. Nyrstar has announced a plan to reduce zinc smelter output by around 25% starting in April. Similarly, Glencore Plc is also reviewing its global zinc smelting assets, suggesting that supply constraints may impact metal markets.

Holtum highlighted the need for a comprehensive evaluation of all assets, including the troubled Nyrstar Australia operations. Zinc prices decreased by 0.6% to $2,955 per ton on the London Metal Exchange, while lead prices also experienced a decline.