Zinc Prices Hold Steady Amid Market Uncertainty, Global Deficit Grows

Key Highlights

• Price Trends: Zinc prices showed minor fluctuations, with stable support levels across LME, SHFE, and MCX markets.
• Supply Constraints: A global zinc deficit of 62,000 mt in 2024, worsened by Red Dog Mine’s slowdown, continues to pressure supply.
• Market Reactions: SHFE zinc faced resistance, while MCX zinc responded to rising inventories and potential policy shifts in China.
• Geopolitical Impact: Strengthening of the US dollar and potential tariff decisions are influencing price movements and market sentiment.
• Market Outlook: Zinc has immediate support at 266.7, with a possible decline to 265.3, while resistance remains at 269.8.

Zinc Prices

• LME: As of yesterday, LME zinc opened at $2,808/mt, reaching a high of $2,846/mt and low of $2,801/mt, and It closed higher at $2,809.5/mt, up $1.5/mt or 0.05%. Today, LME Zinc trading commenced at $2,808.06/mt.
• SHFE: As of yesterday, the most-traded SHFE zinc 2504 contract opened at 23,655 yuan/mt. Hitting a high of 23,670 yuan/mt, eventually closing higher at 23,580 yuan/mt, up 25 yuan/mt or 0.11%. Today, SHFE Zinc trading commenced at 23,460 yuan/mt.
• MCX: As of yesterday, MCX Zinc prices opened at Rs 267.85/kg, reached the highest level of Rs 270.15/kg, lowest level at Rs 267.05/kg and finally closed down at Rs 268.05/kg, a decrease of 0.05 or 0.02%. Today, MCX Zinc trading commenced at Rs 267.20/kg.

Zinc Supply & Demand

• LME Opening Stock - 164950 | Live Warrants - 145700 | Cancelled Warrants - 19250
• LME zinc saw increased trading volume but a decline in open interest, with support from lower Bollinger Bands. Zinc inventory dropped slightly, offering price support, while Trump’s tariff announcement and Fed rate stance add market uncertainty.
• SHFE zinc faced resistance from moving averages, with falling trading volume and expectations of rising supply. Recovery in downstream consumption remains slow, keeping prices in a fluctuating trend.
• MCX zinc reacted to rising SHFE inventories, while China’s central bank signaled possible policy adjustments.
• Global zinc production has declined for three years, with Red Dog Mine’s slowdown adding to supply concerns. The market shifted to a 62,000-mt deficit in 2024, driven by lower output in China, Japan, and South Korea, while demand remained stable.

Zinc News

• Korea Zinc emerges as key supplier of rare metals. Rare metals, such as indium and antimony, are key ingredients that are used in semiconductors, solar energy, and defense industries.
• MCX Zinc prices settled marginally lower by -0.02% at 268.05, erasing earlier gains as the U.S. dollar strengthened ahead of President Donald Trump’s upcoming tariff decisions.
• Zinc prices on Thursday slipped 0.15 per cent to Rs 267.70 per kilogram in futures trade as speculators reduced their exposure, tracking negative cues from the spot market. On Multi Commodity Exchange (MCX), zinc contracts for March delivery traded 40 paise or 0.15 per cent lower at Rs 267.70 per kg in 2,355 lots.

Expert Opinion

In experts’ opinion, the market saw fresh selling pressure with a slight increase in open interest by 0.13% to 2,345. Zinc has immediate support at 266.7, with a potential decline to 265.3, while resistance is seen at 269.8, and a breakout could push prices toward 271.5.