Zinc Ingot Prices Climb in Europe and Asia Amid Economic Stimulus and Supply Disruptions

During the week concluding on September 20^th, the cost of Zinc Ingot witnessed a notable rise in both European and Asian markets. This increase is the result of several contributing factors. The recent reduction in interest rates by the Federal Reserve, coupled with climbing electricity expenses, heightened demand, and interruptions in the supply chain, have all played a role. Additionally, a range of governmental measures designed to invigorate the economy has also amplified this upward movement in prices.

In Germany, Zinc Ingot prices climbed by 1% during this period. The Federal Reserve's decision to cut rates played a pivotal role in this increase, complemented by rising electricity prices across different regions of the country. The energy cost spike was observed in most major European markets, driven by heightened demand and reduced solar energy production in certain areas. Adding to this economic landscape, the European Central Bank implemented a second consecutive reduction in borrowing costs, further influencing market dynamics.

South Korea witnessed a more pronounced 2% increase in Zinc Ingot prices. This rise is underpinned by robust export performance and elevated demand from downstream sectors. The housing price index showed an uptick, indicating demand recovery from the construction sector. This is expected to drive up demand for Zinc Ingot in the region. In a significant development for the shipbuilding industry, which is a major consumer of Zinc Ingot, HD Korea Shipbuilding & Offshore Engineering Co. secured a substantial order worth 674.6 billion won (approximately $511.3 million) from an Asian shipping company. The South Korean Zinc industry is also experiencing internal shifts. MBK, in collaboration with Young Poong (the largest shareholder of Korea Zinc), has initiated a public tender offer to acquire up to 14.6 percent stake in the smelter. This move has intensified an ongoing management tussle, with the MBK-Young Poong coalition arguing that the current leadership has weakened Korea Zinc's financial health, while Korea Zinc views the share purchase attempt as a hostile takeover bid.

Japan has seen the most significant growth in Zinc Ingot prices among others, with a 2.2% upsurge. The boost is attributed to a surge in new construction orders and export activities. The Japan Construction Federation (JCFC) has observed a 4% increase in domestic construction orders over the previous year, with the transportation machinery and chemical sectors seeing orders nearly double. Consequently, the demand for Zinc Ingots has escalated. In terms of monetary policy, the Bank of Japan has decided to keep the interest rates unchanged after their initial meeting post the rate increase in July. This move indicates a careful strategy by the policymakers who are vigilantly observing the fluctuations in the financial market and the economic impact of the last rate hike, which in turn has positively influenced the Zinc Ingot market.

Looking ahead, ChemAnalyst predicts continued growth in the Zinc Ingot market, particularly in Asia. With Asian economies showing signs of recovery and growth, a further surge in Zinc Ingot prices is anticipated in the coming months.