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 – Q4 2023
The summer saw robust downward pressures for construction materials, with China's weakness having the greatest impact on zinc given its construction properties. However, in the second half of the quarter, inventories began to diminish once again, pushing zinc back to the $2,600/t level. From the fundamental perspective, news of production cuts in overseas mines are helping to support zinc prices. Market fundamentals for zinc remain tight, and we expect zinc to trade marginally higher in the coming months.
The global economy performed better than expected so far in 2023, but concerns about a cold winter, rising oil prices, high borrowing costs, and China's economic slowdown are looming large. Central banks are maintaining the narrative of higher-for-longer interest rates due to persistent higher prices, which has weighed on base and precious metals' performance. Despite pledges from Beijing to support the economy, current measures are not expected to have an immediate impact on the real estate sector, which means that there is unlikely to be a large-scale property development that would increase demand for stainless steel prices in the last quarter of the year. Nonetheless, the cumulative impacts of policy support and a dovish monetary policy in China should create a solid foundation for the economy to recover in 2024. Such a transition should push the sentiment from the oversold into neutral. News out of China and the US should bring stronger bounds of volatility in base metals’ performance in Q4 2023.
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