Zinc Prices See Positive Movement Amid Tight Supply and Market Fluctuations

Zinc Ingots

02 Dec 20242 Min ReadDaily Market Report

Zinc prices have shown an uptick across major markets, with LME, SHFE, and MCX prices all reflecting positive trends. The price rise is attributed to supply concerns, particularly after large withdrawals from LME warehouses by Trafigura and a decline in SHFE inventories. Although demand remains subdued, market fluctuations are expected.

Key Highlights

Zinc Price Rise: LME, SHFE and MCX zinc prices increased, driven by rising inventories, weaker USD and market fluctuations.
Supply Concerns: Zinc supply remains tight, with LME inventories at a one-year low and global zinc deficit narrowing. Supply concerns may lead to output cuts due to lower smelter margins.
Zinc Market Outlook: Experts expect continued price fluctuations with potential support at Rs 283.6 and resistance at Rs 288.5, with further upward movement possible if key levels are breached.

Zinc Prices

LME: As of last Friday, LME zinc opened at $3,049/mt, reaching a high of $3,112.5/mt and low of $3,040.5/mt, and finally closing up at $3,108.5/mt, an increase of $61/mt or 2%. Today, LME Zinc trading commenced at 3,103.5/mt.
SHFE: As of last Friday, the most-traded SHFE zinc 2501 contract opened at 25,385 yuan/mt, initially fluctuating widely along the daily moving average, closing up at 25,550 yuan/mt, an increase of 350 yuan/mt or 1.39%. Today, SHFE Zinc trading commenced at 25,455 yuan/mt.
MCX: As of last Friday, MCX Zinc prices opened at Rs 283.45/kg, reached the highest level of Rs 287.05, lowest level at Rs 282.10/kg and finally closed down at Rs 286.70/kg, an increase of 3.90 or 1.38%. Today, MCX Zinc trading commenced at Rs 286/kg.

Zinc Supply & Demand

LME Opening Stock - 276850 | Live Warrants - 169175 | Cancelled Warrants - 107675
LME: Trading volume dropped to 10,611 lots, open interest up by 187 lots to 249,000. Zinc rose after inventory increased by 8,225 mt (+3.06%). Expecting high fluctuations with the US Fed's interest rate cut and weaker dollar.
SHFE: Trading volume at 177,000 lots, open interest fell by 977 lots to 144,000. Zinc rose due to weaker USD and domestic mine issues. Expecting continued strength.
MCX: Zinc up 1.38% to Rs 286.7, supported by a 10.6% drop in SHFE inventories and supply concerns from Trafigura’s large withdrawal. Tight market keeps prices elevated.
Global zinc deficit narrowed to 79,500 mt in September, with China’s production rising but still lower YoY.

Zinc News

Zinc Gains As SHFE Inventories Fell 10.6% From last Friday.
Trafigura Group placed large zinc withdrawal orders from London Metal Exchange (LME) warehouses, leading to a 5.5% price increase last week and reducing LME zinc inventories to a one-year low of 154,125 tons. Despite subdued demand, supply concerns are rising due to falling smelter margins and processing fees, which may force output cuts.
Korea Zinc shares surge over 25% ahead of shareholder showdown.
Norway has suspended plans to start giving licences for deep-sea mining next year that had faced opposition from environment groups and international institutions, a party allied with the centre-left government said on Sunday.

Expert Opinion

In experts’ opinion, Zinc saw fresh buying interest, with open interest surging by 24.65% to 3,160 contracts. Immediate support is at Rs 283.6, with further downside testing possible at Rs 280.4. Resistance is seen at Rs 288.5, with a potential move toward Rs 290.2 if breached. Zinc trading range for the day is Rs 280.4-290.2.