Zinc Market Update: Prices Rise on LME, Decline on SHFE & MCX
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Zinc prices showed mixed movements across global markets. LME saw a 1.33% increase, while SHFE and MCX saw minor declines. Global zinc markets are facing a supply deficit, and uncertainties, such as U.S. tariffs, are affecting investor sentiment. Additionally, refined zinc production in China showed growth, while stockpiling and inventory dynamics provided market support.
Key Highlights
- LME Zinc Price Movements: LME Zinc prices rose by 1.33% yesterday, closing at $2,860/mt, supported by strong market sentiment.
- SHFE Zinc Decline: SHFE Zinc experienced a slight decrease of 0.04%, closing at 24,100 yuan/mt, driven by bearish trends in volume.
- MCX Zinc Prices Up: MCX Zinc prices increased by 0.76%, closing at Rs 271.55/kg, fueled by optimism about China's economic stimulus.
- Zinc Supply Deficit: The global zinc market experienced a deficit of 69,100 mt in October, amid declining refined production and mining output.
- Tariff Concerns Impact Market Sentiment: Concerns about U.S. tariff policies and global uncertainties are affecting market dynamics and investor caution.
Zinc Prices
- LME: As of yesterday, LME zinc opened at $2,826/mt, reaching a high of $2,876/mt and a low of $2,818.5/mt, and finally closed up at $2,860/mt, an increase of $37.5/mt or 1.33%. Today, LME Zinc trading commenced at $2,858/mt.
- SHFE: As of yesterday, the most-traded SHFE zinc 2502 contract opened at 24,185 yuan/mt, reached a high of 24,235 yuan/mt and a low of 24,040 yuan/mt, and finally closed down at 24,100 yuan/mt, a decrease of 10 yuan/mt or 0.04%. Today, SHFE Zinc trading commenced at 24,145 yuan/mt.
- MCX: As of yesterday, MCX Zinc prices opened at Rs 270.15/kg, reached the highest level of Rs 272.40, lowest level at Rs 268.70/kg and finally closed down at Rs 271.55/kg, an increase of 2.05 or 0.76%. Today, MCX Zinc trading commenced at Rs 271.70/kg.
Zinc Supply & Demand
- LME Opening Stock - 216900 | Live Warrants - 170300 | Cancelled Warrants - 46600
- LME: Zinc trading volume dropped to 12,648 lots, with open interest rising by 366 lots. Zinc formed a bullish candlestick, facing resistance at the 5-day moving average, while inventory fell 1.64%. US tariff concerns and a strong dollar pressured prices.
- SHFE: Zinc volume was 53,502 lots, with open interest up by 74 lots. Zinc formed a bearish candlestick, supported by the lower Bollinger Band. Raw material stockpiling and declining inventory provided some support.
- MCX: Zinc stocks in Shanghai Futures Exchange warehouses fell by 20.9% week-on-week. China’s refined zinc production increased by 1,000 mt month-on-month in November but decreased by nearly 12% year-on-year. Cumulative production for January-November showed a 6% year-on-year decline. December saw a 5% growth in refined zinc production.
- Globally, the zinc market had a deficit of 69,100 mt in October, with a 1.7% drop in refined production and a 3.8% decline in mine output.
Zinc News
- MBK files lawsuit against Korea Zinc directors, seeks $500 million in damages.
- MCX Zinc prices rose 0.76% to settle at Rs 271.55, driven by optimism surrounding Beijing’s recent commitments to enhance monetary and fiscal stimulus to support economic growth. However, uncertainties around U.S. President-elect Donald Trump’s tariff plans continue to pose risks to the commodity market, keeping many investors cautious.
Expert Opinion
In experts’ opinion, the market saw short covering, as open interest dropped by 13.63% to 3,219 contracts. Zinc is supported at Rs 269.4, with further downside possible to Rs 267.2. On the upside, resistance is at Rs 273.1, with a breakout potentially testing Rs 274.6.
Daily Market Report
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Zinc Markets Show Positive Movements Amid Tight Supply and Chinese Stimulus
Zinc prices have been on the rise, supported by falling LME stocks and positive sentiment surrounding Chinese economic stimulus measures. The market shows signs of tightness, with reduced inventories and short covering. Despite global production deficits, a stronger U.S. dollar and uncertainties surrounding U.S. tariffs have capped further gains.
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Zinc Prices Drop Amid Uncertainty Over US Tariffs, Economic Slowdown and Weak Chinese Demand
Zinc prices saw a decline due to tariff uncertainty, weak economic outlook, and imbalances in supply and demand. LME Zinc dropped by 1.96%, with the SHFE and MCX markets following similar downward trends. Zinc inventories in key markets also saw declines, indicating supply-side challenges.
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