Zinc prices, which experienced a downturn in the last quarter due to reduced Chinese demand, are expected to hold steady through to December. This optimism is in part due to the anticipation of China’s economic recovery.
The London Metal Exchange (LME) registered a decline in zinc’s spot price, now hovering around $2,601. This drop was further emphasized by the Australian Office of Chief Economist (AOCE), attributing it to concerns over shortages in zinc refining capacities.
However, despite China’s ongoing property crisis affecting the metal’s price, there’s a renewed hope. The AOCE predicts an average price of about $2,700 a tonne for 2023, a sentiment somewhat shared by research agency BMI, forecasting $2,550 in the same year.
A notable trend is the International Lead and Zinc Study Group (ILZSG) report that global refined zinc supply surpassed demand by 370,000 tonnes in the first half of 2023. External factors like inclement weather have also played their part, affecting mining operations in various regions.
In a related development, ING Think pointed out a significant rise in cancelled warrants at LME warehouses, hinting at increasing demand.
Looking further ahead, BMI’s long-term perspective on zinc prices remains cautious, expecting averages of $2,150/tonne from 2024 to 2027. The AOCE similarly projects a dip to $2,500 in 2024, with slow demand growth for zinc.