A fire at Korea Zinc's Onsan smelter has been contained and deliveries are set to continue as usual, two sources at the company told Fastmarkets.
The fire, which lasted for around half an hour, took place in the plant's power transformer, according to local
daily newspaper JoongAng Ilbo.
London Metal Exchange three-month zinc futures have risen 1.4% from yesterday's close to $2,591 per tonne as of 9:30am UK time today, while sources at the company said the fire would not affect production.
"It will be sorted out over the weekend," one company source - who declined to be named - said.
"Everything will be fine soon," another added.
Media representatives for Korea Zinc were not available to comment on the situation when approached by Fastmarkets.
Customers unaware of delays
Korea Zinc has also refuted that its March delivery schedule has been affected by the accident.
After the fire, market sources' suggested that March contract deliveries of Korea Zinc ingots to Chinese clients could be delayed.
While a possible capacity cut would last for at least 15 days, a source close to the matter said.
Yet, Chinese clients that have long-term contracts with Korea Zinc have said that the smelter has not informed them of possible delays when approached by Fastmarkets. Korea Zinc's customers in Taiwan are also uninformed of any delays to their allotted deliveries of zinc and lead.
"Korea Zinc didn't inform their clients of [delays] here," a zinc and lead source in Taiwan said.
Typically, the Sukpo smelter mainly supplies zinc to Southeast Asian buyers while Sun Metals Corp, an Australian subsidiary of Korea Zinc, is responsible for supplying contracted tonnages to Chinese clients.
Spot premiums for Special High Grade zinc ingots declined to a six-month low of $135-145 per tonne, on a cif Shanghai basis on Tuesday February 12, after an expected surge in demand for units did not appear following the Lunar New Year.