Expert zinc market insights
Our quarterly zinc outlook is published in our Quarterly Metals Report, which covers base, precious and ferrous metals. The impact of supply and demand fundamentals and macroeconomic implications for the zinc futures and spot prices are analysed. Our research team produce a zinc price range forecast as part of the report.
Zinc Outlook – Q1 2024
Despite the lacklustre state of the Chinese economy, zinc fundamentals have remained steady due to factors such as reduced domestic production and increased reliance on imports. However, the structural and cyclical indicators are important in driving the price narrative in the coming months. We expect zinc prices to follow a mean-reversion strategy but continue on a slight upward trend in Q1 2024. The resistance at $2,700/t is key; a break above it could trigger stronger gains on the upside.
During the last quarter, the markets expected the Fed to begin a cutting cycle, which caused the dollar and Treasury yields to decrease. This, along with predictions of China's recovery in 2024, boosted the prices of base metals by the end of the year. However, in Q1, the situation has changed. The US economy has shown robustness in terms of the labour market and consumer performance, which has led the market to price in the probability of cuts further down the curve. Additionally, despite continued support from the government, Chinese pessimism has yet to subside. In the upcoming months, macroeconomics will continue to play a crucial role in driving the day-to-day momentum, particularly in the aluminium and copper markets. Structural and cyclical indicators will also come into play when assessing the path for base metals performance. COT positioning, spreads, and stocks will drive the general price trend in the first half of the year while anticipating an economic recovery and easing monetary policy pressures in the latter half of the year.
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