Zinc Ingot Prices Decline in US Market as Supply Grows, Dollar Strengthens

At the start of the fourth quarter, the price of Zinc Ingot dampened in the US spot market as their supply rate showed significant growth in the local warehouses. The strengthening of the dollar creates an alarming situation in the demand side for metals. The demand for Zinc Ingot from the downstream galvanizing industries remains stable amidst various global mining companies, increasing the production rate of Zinc Ingot. The mining region of several nations such as Canada, Japan, and some from the European region has also announced their plan for expansion of the production rate of feedstock Zinc. Furthermore, the declining trend of the Chinese property and housing sector has played a major role in the decline in the price of Zinc Ingot across the US spot market.

Recently, T2 Metals Corp., a Canadian metal discovery company, announced the commencement of drilling activities at the Sherridon copper-zinc project in west-central Manitoba. This development has led to an upward trend in the inventory levels and subsequently impacted the supply rate of Zinc Ingot. The company has been granted a Work Permit, allowing them to carry out the 2023 and future drill programs until May 2026, pending notification of future proposals. In addition, Adriatic Metals PLC, an overseas European-based exploration company, has revealed its collaboration with Boliden AB, a Swedish mining company, to acquire zinc concentrates from the Vares silver project in Bosnia. Simultaneously, the Raska zinc deposit in Serbia has planned an increase in production, contributing to a downward price trend for Zinc Ingot in the US spot market. During the third quarter, there was an approximately 11% increase in contract signings due to heightened demand. However, this surge in inventory levels has restrained demand, given the prevailing market dynamics. Meanwhile, the dollar has remained strong due to expectations that the Federal Reserve will maintain higher interest rates.

Meanwhile, the local manufacturers anticipate price stability in the coming months, driven by gradual improvements in mined and refined output, which alleviate market tightness. Notably, there are indications that European Zinc Ingot smelters may boost production in the last quarter, exerting downward pressure on Zinc Ingot prices both in the US spot market and globally. Conversely, China's property crisis in the last quarter has significantly influenced zinc price fluctuations, causing a drop from USD 3,100 to USD 2,500 per metric ton in the past week. Nevertheless, industry experts foresee stability in Zinc Ingot prices through December. This prediction is rooted in reduced Zinc Ingot production in European and Australian mines overseas, with market signals suggesting a rise in demand. ING Think has pointed out increasing canceled warrants at local and foreign warehouses and declining inventory indicators of growing demand.

According to ChemAnalyst, the price of Zinc Ingot is expected to remain stable for a few weeks amidst rising dollar value and uncertain market conditions across the US spot market. The current hike in inventory level tends to prevail for a few days, but the major market players anticipate later growth. With the demand from the downstream galvanizing industries along with the rising electric vehicle demand, the consumption rate of Zinc Ingot is likely to increase. The Zinc Ingot market is expected to boom in H2 of the last quarter of 2023.