US Zinc Ingot Price Increase at the Start of December Amidst Low Manufacturing Activity

In the initial week of December, the price of Zinc Ingot experienced a downward trend in the US spot market due to a decrease in manufacturing rates in both the domestic and overseas Chinese markets. The ample supply in local warehouses created uncertainty among major market participants. There is anticipation that if the supply trend continues to rise, mills may be compelled to shut down. Furthermore, the previously observed tendency of US Federal Interest rate hikes has subsided, contributing to an uncertain market trend for Zinc Ingot among domestic buyers.

Zinc Ingot prices faced a price decline, dropping by -2.13% at the start of December, primarily influenced by profit-taking activities. The northward shift occurred as strong supply signals alleviated concerns about potential mine closures. By the end of November, inventories of Zinc Ingot reached 226,250, marking a more-than-two-year high. This surge in inventories reflects subdued economic activity, impacting market sentiment. The notable increase in warehouse inventories aligns with an oversupply of Zinc Ingot, especially used in steel galvanization. Moreover, the consumption of the downstream Galvanized Plain Sheet also seemed to plunge as the import quantity reduced by 6% from the previous month's data.

Meanwhile, weak economic conditions, particularly in Europe, have hindered industrial manufacturing. Consequently, data from the International Lead and Zinc Study Group (ILZSG) indicates that the worldwide Zinc Ingot market shifted from a surplus of 28,000 metric tons in August to a deficit of 15,400 metric tons in September. Despite this shift, the cumulative surplus of Zinc Ingot for the first nine months of the year amounted to 475,000 tons, significantly higher than the 47,000 tons surplus during the same period last year. Furthermore, softer inflation data in both the United States and the Eurozone has strengthened expectations that central banks may refrain from further interest rate hikes. This, in turn, has led traders to anticipate the possibility of earlier rate cuts and an uplifting market trend for Zinc Ingot in the coming year.

According to ChemAnalyst, the price of Zinc Ingot is expected to decrease in the upcoming weeks as the arrival of winter has halted manufacturing and construction activity across most regions in the US. Meanwhile, the US Federal Reserve has temporarily paused its hawkish tendency to increase the interest rate, creating a potential for recovery in January and February 2024. Market players are expected to engage in deals for Zinc Ingot from the next quarter as the market is anticipated to turn bullish starting in early 2024.