China's property crisis in the last quarter has been a significant factor in the fluctuation of zinc prices, which have seen a drop from $3,100 to $2,500 a tonne. As of Wednesday, the London Metal Exchange (LME) spot price is at $2,601 a tonne. Despite this, experts predict that zinc prices will remain stable through December.
The Australian Office of the Chief Economist (AOCE) forecasts an average price of $2,700 a tonne for 2023. This projection is based on reduced zinc production in Europe and Australia. On the other hand, the International Lead and Zinc Study Group (ILZSG) reported a surplus of 370,000 tonnes in global zinc supply over demand for the first half of 2023.
Market signals also suggest an increase in demand. ING Think pointed out a rise in cancelled warrants at LME warehouses and declining inventories on the Shanghai Futures Exchange as indicators of increasing demand.
Despite these signs, BMI Research maintains a long-term negative view on zinc prices. They forecast an average price of $2,150 per tonne from 2024 to 2027. Furthermore, they anticipate 'weak zinc demand growth'.
While there are differing views on the future trajectory of zinc prices, current market conditions suggest stability for the remainder of 2023.
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