Zinc prices fell -0.41%, setting at 219.45, as worries regarding reductions in interest rates and China’s uncertain economic recovery weighed on the market sentiment. The uncertainty created by the United States Federal Reserve’s postponed interest rate cuts impacted global markets.
China’s economic performance lagged slightly below forecasts, and data from the real estate industry. Where sales of properties measured by floor area fell by 23% in December, was especially concerning.
A review of additional economic data for the same month showed modest increases in retail sales. Modest growth in investment, and some rise in industrial production.
Statistics from the International Lead or Zinc Study Group (ILZSG) indicates that in November 2023. The worldwide zinc market showed a shortfall of 71,600 metric tonnes, up from a shortfall of 62,500 tonnes in October.
The ILZSG did, however, report a 211,000-ton surplus for the first 11 months of 2023—a significant change from the 86,000-ton deficit for the same period in 2022.
Premier Li Qiang of China provided a more upbeat assessment, saying that the country’s economy had recovered and was growing, projecting a growth rate of about 5.2% in 2023—above the official goal of about 5%.
Technically speaking, the zinc market is experiencing new selling. As evidenced by a 2.77% rise in open interest that settled at 2408. Zinc prices have dropped by -0.9 rupees, with 218.2 acting as support.
If this level is broke, prices may test 217. Resistance is seen at 220.8; a move above could take prices as high as 222.2.