RE:RE:RE:RE:Zinc down to $1.09 Very little trading in futures markets involves delivery. For the most part it is just a financial transaction. If Trevali shorted the futures at $1.15 and the price dropped to $.95, they would simply receive $.20 per pound for the 25M pounds they shorted in that particular month for a profit of $5M on the short. That money would help offset the lower price they would receive from Glencore. If zinc went up to $1.35, they would lose $5M on the short, but they would make a lot more on the zinc they sold to Glencore. It would basically just be an insurance policy. The physical zinc would still all go to Glencore.
As Firecracker pointed out, there are a lot of ways to hedge including just buying puts or buying puts and selling calls (collars). Simply shorting at the current price is just one of the simplest ways.