Zinc Prices Increase Across LME, SHFE and MCX; Global Zinc Supply Deficit Expected to Impact 2024 Production

Key Takeaways

• LME Zinc Climbs on Easing Monetary Policies: LME zinc closed higher, supported by central banks' potential easing policies, with prices up 1.48% from last week.
• SHFE Zinc Slows Amid Weak Domestic Consumption: Despite policy support in China, SHFE zinc growth was limited by sluggish domestic demand, closing 0.76% higher.
• MCX Zinc Rises as China's Economy Surpasses Expectations: Strong economic data from China led to a 1.06% rise in MCX zinc, despite concerns about the country's real estate sector.
• Global Zinc Market Faces Supply Deficit in 2024: The International Lead and Zinc Study Group (ILZSG) forecasts a 164,000-ton supply deficit due to raw material shortages affecting refined metal production. Hindustan Zinc Reports 35% Profit Growth: Hindustan Zinc’s net profit surged by 35%, backed by increased revenue and strategic investments, including renewable energy ventures.

Zinc Prices

• LME: As of last Friday, LME zinc opened at $3,059/ton, hitting a high of $3,096/ton, and low of $3,033/ton, and finally closed up at $3,089/ton, an increase of $45/ton or 1.48%. Today, LME Zinc trading commenced at 3,098.5/ton.
• SHFE: As of last Friday, the most-traded SHFE zinc 2411 contract opened at 25,200 yuan/ton, hitting a high of 25,250 yuan/ton, finally closed down at 25,160 yuan/ton, an increase of 190 yuan/ton or 0.76%. Today, SHFE Zinc trading commenced at 25,230 yuan/ton.
• MCX: As of last Friday, MCX Zinc prices opened at Rs 282.30/kg, reached the highest level of Rs 285.20/kg, the lowest level at Rs 282.30/kg and finally closed down at Rs 284.90/kg, an increase of 3.00 or 1.06%. Today, MCX Zinc trading commenced at Rs 288.50/kg.

Zinc Supply & Demand

• LME Opening Stock - 239025 | Live Warrants - 209125 | Cancelled Warrants - 29900
• LME: Trading volume decreased to 8,488 lots, and open interest increased by 700 ton to 253,000 lots. Last Friday, LME zinc recorded a bullish candlestick, with the middle Bollinger Band providing support below. LME zinc inventory decreased by 2,775 ton to 239,025 ton, a drop of 1.15%. LME zinc inventory recorded a reduction. Last Friday, boosted by expectations of easing monetary policies from multiple central banks, LME zinc fluctuated at highs.
• SHFE: Trading volume decreased to 59,136 lots, and open interest decreased by 848 lots to 93,177 lots. Last Friday, SHFE zinc recorded a small bearish candlestick, with various moving averages providing support below. Domestically, there were proposals for easing monetary circulation policies, and more policies are expected to be introduced. However, actual consumption remains weak, and the momentum for zinc prices to rise is insufficient.
• MCX: Zinc prices rose by 1.06%, closing at 284.9, supported by better-than-expected economic data from China, the world’s largest consumer. China's economy grew 4.6% year-on-year in the third quarter, surpassing expectations of 4.5%, despite a slight slowdown from 4.7% in the second quarter. Strong retail sales, industrial production, and fixed asset investments in September also boosted market sentiment, with industrial production growing by 5.4% year-on-year, outpacing forecasts of 4.6%. However, concerns about China's struggling property sector remain, with new home prices falling significantly.
• On the global front, the zinc market faces a substantial supply deficit in 2024 due to a raw materials shortage that is forcing smelters to reduce refined metal production. The International Lead and Zinc Study Group (ILZSG) revised its previous forecast of a 56,000-ton surplus to a 164,000-ton deficit. Global demand for refined zinc is expected to rise by 1.8% to 13.83 million tons in 2024, while output will be limited by the availability of concentrates, with production forecasted to fall by 1.8%. Despite supply constraints, the ILZSG anticipates a surplus of 148,000 tons in 2025.

Zinc News

• Expectations of easing policies by multiple central banks, LME zinc continues to rise.
• MCX zinc prices surge as strong Chinese economic data boosts market optimism.
• Norwest Minerals eyes economic base metals potential at West Arunta.
• A South Korean court on Monday rejected a request by Young Poong to temporarily block Korea Zinc, opens new tab from proceeding with its tender offer to buy back shares in the company, pushing shares by 6% in the world's biggest zinc refiner to a record high.
• Hindustan Zinc's net profit rose 35% to Rs 2,327 crore, driven by increased revenues. The company plans a 26% equity investment in Serentica Renewable and declared a Rs 19 interim dividend.

Explore more industry updates and zinc news here!

Expert Opinion

• The market witnessed fresh buying as open interest increased by 0.57% to settle at 2,275 contracts. Zinc prices rose by 3 rupees, finding support at 283. A break below this level could see prices testing 281.2.
• On the upside, resistance is likely at 285.9, with prices potentially reaching 287 if the bullish momentum continues. The market remains sensitive to supply-demand dynamics and economic conditions in China.