Zinc Market Update: LME, MCX and SHFE Prices Fall as Supply Tensions Ease

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07 Nov 20242 Min ReadDaily Market Report

Zinc prices have been experiencing fluctuations across multiple markets. The LME zinc price dropped by 4.65% with SHFE prices falling by 0.62%. On the MCX, zinc closed at a decrease of 3.23%. Inventory levels have increased, particularly with a rise in LME stocks, easing some short-term supply concerns.

Key Takeaways

Zinc prices have dropped across multiple exchanges, with LME, SHFE, and MCX prices all experiencing declines.
China's zinc production has been impacted by weak industrial profits, leading to a decrease in demand and slowing production growth.
Despite easing supply fears, challenges such as raw material shortages and weak demand from China continue to weigh on zinc prices.

Zinc Prices

LME: As of yesterday, LME zinc opened at $3,085.5/mt, low of $2,960/mt, and finally closing down at $2,966/mt, a drop of $144.5/mt, or 4.65%. Today, LME Zinc trading commenced at 2,984.5/mt.
SHFE: As of yesterday, the most-traded SHFE zinc 2412 contract opened at 24,665 yuan/mt, hitting a high of 24,880 yuan/mt and a low of 24,605 yuan/mt, SHFE zinc finally closed down at 24,800 yuan/mt, a drop of 155 yuan/mt, or 0.62%. Today, SHFE Zinc trading commenced at 25,170 yuan/mt.
MCX: As of yesterday, MCX Zinc prices opened at Rs 286/kg (the highest level), lowest level at Rs 277.75/kg and finally closed down at Rs 278.55/kg, a decrease of 9.30 or 3.23%. Today, MCX Zinc trading commenced at Rs 282.70/kg.

Zinc Supply & Demand

LME Opening Stock - 245325 | Live Warrants - 238550 | Cancelled Warrants - 6775
LME: Trading volume increased to 14,908 lots, while open interest dropped to 247,000 lots. Zinc recorded a bearish trend, with inventory down by 350 mt. A stronger USD following Trump’s policies drove base metals lower, including LME zinc, which is expected to fluctuate today.
SHFE: Trading volume fell to 86,425 lots, with a bullish candlestick for zinc. Concerns about US policies impacted exports, likely keeping SHFE zinc volatile today.
MCX: Zinc dropped 3.23% to 278.55 as inventory eased supply concerns. The premium on cash contracts narrowed as stocks rose to 242,425 tons, but raw material shortages limit gains.
Additionally, China’s industrial profits dropped in September, highlighting weak demand and falling producer prices.
Russian zinc producer Ozernoye faces sanctions-related challenges, jeopardizing its 2025 target of 320,000 metric tons. China’s refined zinc output rose 2% month-on-month but fell 8% year-on-year; modest growth is expected in October, mainly in Inner Mongolia, Shaanxi, and Hunan.

Zinc News

The SHFE zinc market has shifted downward, reflecting a broader bearish sentiment across commodities.
MCX zinc prices have fallen as inventory inflows have alleviated previous concerns over potential supply shortages.
Hanwha Energy Corp., part of the Hanwha Group, has signed an agreement to acquire 5.4 million Hanwha Corp. shares from Korea Zinc in a block trade valued at 152 billion won ($108 million).
China’s Zinc Smelter Purchasing Team (CZSPT) has set the domestic processing fees for zinc concentrate at between 2,000 yuan ($281.57) and 2,500 yuan per metric ton for the first quarter of 2025, according to the Media reports. The new fees reflect the industry’s ongoing challenges, including a tight ore supply and declining smelting margins.

Expert Opinion

In experts’ opinion, zinc is experiencing fresh selling, with open interest rising by 6.84% to 3,094. Support is seen at 275.6, with further potential down to 272.5, while resistance lies at 283.9; breaking this level could lead prices to test 289.1. This indicates continued caution in the market amidst easing supply concerns and production challenges.