Nyrstar's Auby zinc plant on care and maintenance until further notice

LONDON (Reuters) - Nyrstar has completed scheduled maintenance work at its Auby operation in Northern France, but the smelter will not resume zinc production due to challenging market conditions, the company said on its website.

The Netherlands-based company said the decision was based on the latest power price outlook and inflation across a range of input costs impacting the business.

High power prices have spurred suspensions and cutbacks by smelters throughout Europe.

"The plant will now be placed on care and maintenance until further notice," Nyrstar said.

"This period will be used to bring forward future planned investments to improve operational stability and efficiency of the Auby smelter once operations are able to restart."

Nyrstar put its zinc smelting operations at Budel in the Netherlands on care and maintenance in September.

Metal industry sources say Nyrstar has the capacity to produce 720,000 tonnes of zinc in Europe, with 315,000 of that at Budel.

Europe accounts for around 15% of global supplies of zinc estimated at about 14 million tonnes this year.

Benchmark zinc prices on the London Metal Exchange hit a record high of $4,896 a tonne in March on worries about shortages, but have since dropped 36% to around $3,125 a tonne as growth and demand slowed.

(This story has been corrected to remove Belgium-listed, and add Netherlands-based)

(Reporting by Pratima Desai; Editing by Louise Heavens)