SunSirs: Last Week, Zinc Prices Fluctuated and Weakened (December 15-19)

Price trend:

According to the commodity price analysis system of SunSirs: As of December 19th, the price of 0# zinc was 23,138 RMB/ton, a decrease of 1.23% from the price of 23,426 RMB/ton on December 15th.

The overall market sentiment was positive

Monetary policies were diverging across major global economies, and increased expectations of interest rate cuts by the Federal Reserve, along with expectations of looser liquidity, were positive factors for metal prices. Domestic macroeconomic data showed a moderate recovery, with signals such as rising CPI and a rebound in exports boosting market confidence. Overall macroeconomic sentiment was generally positive, providing external support for zinc prices.

Raw materials

As of December 19, processing fees for zinc concentrate continued to decline. This had significantly squeezed the profit margins of smelters, with some even falling into losses. Meanwhile, mines in northern regions were entering a period of seasonal production cuts, further exacerbating the tight supply situation for raw materials.

Supply and demand

Domestic zinc ingot supply was showing a significant contraction, mainly due to two factors: concentrated maintenance work at smelters and tight raw material supply.

Domestic end-market demand continued to show seasonal weakness. Entering November, the galvanized steel, die-cast zinc alloy, and zinc oxide industries were primarily focused on meeting essential needs in terms of procurement, and inventory pressure had not yet been significantly alleviated.

Market Outlook

The supply side of zinc continued to tighten, providing strong support for prices. However, high inventory levels and weak demand were significantly limiting the upward potential of prices. In the short term, zinc prices are likely to maintain a volatile and weaker trend.

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