Price trend:
According to the commodity market analysis system of SunSirs, as of November 28th, the zinc price was 22,356 RMB/ton, an increase of 0.40% compared to the zinc price of 22,558 RMB/ton on November 1st.
In early November, zinc prices rose due to tighter supply, cost support, and export expectations, but later the upward potential was limited by weak demand and high inventory pressure.
Regarding raw materials:
In November, domestic northern mines entered their seasonal production reduction period, resulting in a month-on-month decrease in zinc ore output. Imported ore suffered widening losses due to extremely low Shanghai-London price ratios, limiting the potential for further import growth. Overall, zinc ore supply tightened, and processing fees fell rapidly, providing cost support for zinc prices.
Supply and demand
On the supply side, some smelters voluntarily reduced production in November due to tight raw materials and squeezed profits, and refined zinc output is expected to decline slightly month-on-month. However, the release of new capacity still provided some support for supply, and the overall supply pressure eased marginally.
On the demand side, downstream industries such as galvanizing, die-casting zinc alloys, and zinc oxide are entering the off-season, with operating rates expected to weaken month-on-month. End-user consumption was sluggish, with continued weak demand in infrastructure and real estate sectors, limiting their impact on zinc prices. While consumption in Europe and the US was showing marginal signs of recovery, and demand in sectors like automobiles and photovoltaics remained resilient, overall demand growth was weak and unlikely to provide strong support for zinc prices.
Market outlook
In November, domestic zinc ingot social inventories remained high, but the export window for zinc ingots remained open, with some zinc ingots flowing overseas or to LME warehouses, which alleviated domestic inventory pressure to some extent. Zinc prices are expected to exhibit a range-bound, slightly upward trend.
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