Zinc prices fell by -2.51% to 209.85, as concerns about an economic or demand slowdown in China, the world’s largest consumer, weighed on the market ahead of a grew public holiday.
An additional blow to confidence was the news that the full ramp-up at Russia’s largest zinc mine. Ozernoye, would not begin operations until at least 3rd quarter of 2024 and that production would be delayed until 2025. The mine’s initial output timeline was disrupted by a plant fire in November and obstacles stemming from Western sanctions.
The pressure heightened as a result of halt in Nyrstar’s Budel smelting operations in Netherlands due to excessive energy expenses.
Even with these supply disruptions, long-term zinc price rallies are unlikely until there is a significant pickup in demand and the market’s attention shifts away from anticipated surpluses of the metal, typically used for steel galvanization.
The market observed fresh selling, resulting in a 7.53% increase in open interest, which settled at 4996.
As of right now, zinc is finding support at 207.2; a breach below that could test 204.5.
On the upside, observers note resistance at 214.7. A move beyond this level could potentially lead to prices being test at 219.5.
The discount for cash over three-month zinc agreements on the LME indicates a lack of concern about zinc supplies, highlighting the general sentiment of the market. Zinc delivery surpluses to LME-registered warehouses. Which have risen by almost 200% since November, are another factor weighing against zinc prices.
Traders keep a careful eye on demand patterns, geopolitical developments, and worldwide economic trends that affect the zinc market.