LME zinc prices declined by $13.4/t that is around 0.48%, falling from $2,781.5/t on 18 August to $2,768.1/t on 22 August. This downward trend was largely driven by sluggish demand from China, the world’s largest zinc consumer, and investors' concerns following hawkish signals from the US Federal Reserve.

However, after the dip, the zinc prices have rebounded to $2,807.5/t as of 25 August, reflecting a $39.4/t (+1.42%) increase. This recovery has been supported by a 10% fall in LME inventories, down to 68,075 tonnes, signalling tight short-term supply and helping prices regain upward momentum.

Though the prices have rebounded but when compared to the same period last year, LME zinc prices are still significantly lower. On 27th August 2024, zinc was trading at approximately $2,943/t, meaning current levels represent a YoY decline of $174.9/t that is a roughly drop of 5.94%. This downfall reflects the persistent oversupply concerns and slow recovery in China’s construction and manufacturing sectors.

Outlook:

The overall zinc outlook is likely to remain cautiously bearish, with price movements likely to stay volatile. Though the short-term supply tightness may continue to offer support. But the market participants will closely observe the Chinese demand, macroeconomic policy shifts, and seasonal consumption trends to assess whether recent gains will be sustainable or not.

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