The global zinc market is facing severe fluctuations
The situation of the zinc market has faced severe fluctuations due to the decrease in availability and the decrease in the volume of this metal's reserves in warehouses.According to the news and analysis site "Felzat Online" and quoted by the "ChemAnalyst" Institute, one of the main reasons for this price fluctuation in the zinc market is due to the departure of a large volume of shipments of this metal from the warehouses of the London Metal Exchange "LME", which speculations in Concerns about the stability of the mentioned metal market and the pressure conditions of traders with selling positions have intensified.
According to some media reports, it is predicted that the chaotic situation and limited access to the zinc market will continue until 2025; This issue can lead to intensification of fluctuations and increase in prices in the near future.It should be noted that the price of zinc decreased by 0.4% on Monday, December 2, 2024, which was mainly due to the increase in the value of the US dollar in the market.
Needless to say, despite the recent decrease in the price of zinc in the market, the average price of this metal has recorded an overall increase of about 16% this year. This shows that the mentioned metal has performed better than other base metals in the "LME" exchange since the beginning of 2024.
It goes without saying that the situation in the zinc market is exactly the same as the copper market is facing. Currently, copper smelting units in China are struggling with the problem of declining profit margins due to the increase in production capacity.This situation in the copper market has led to an increase in competition among smelting units for the supply of raw materials, and as a result, access to copper concentrate has been limited.
In this regard, the prolongation of the negotiation on determining the annual base price for copper smelting units, along with the significant reduction of treatment tariffs, has caused these units to face severe financial problems. Such an event, if sustained, may negatively impact production capacity in both the copper and zinc sectors.
Of course, the chaotic situation in the zinc market has also been affected by continuous disruptions in the process of extraction and supply in the "Kipushi" mine located in the Democratic Republic of Congo, which is managed by "Ivanhoe Mines Ltd".In this regard, the decrease in production capacity in this mine and other zinc mines in the world, despite the drop in demand for it from China, which has faced the problem of stagnation in the steel and property and real estate sectors, is another important factor that decreases The volume of global supply of zinc metal has followed.
In addition to the decrease in the volume of zinc stocks in the warehouse of the "LME" exchange, the stock of this metal in the warehouses of the Shanghai futures exchange has also experienced a significant decreaseAccording to published reports, the volume of zinc reserves in the warehouses of the Shanghai Futures Exchange recorded a decrease of more than 9 thousand tons at the end of November 2024, which is the largest weekly decrease in the past year.
The trend of reducing the volume of zinc reserves in the warehouse of commodity exchanges shows that the pressures on the zinc supply chain and even the concerns about its availability in the market have taken an increasing trend. It is clear that with the continued decrease in the supply of zinc metal in the market, the price of this metal will maintain its fluctuating status in the short term.
The uncertain situation in the zinc market shows that the issue of access to this metal and its price fluctuations will continue to keep traders and investors in a state of uncertainty. Considering such conditions, market participants should consider the possibility of continued price fluctuations, limited availability of zinc in the market, and continued challenges in the production process of this metal for 2025 in their evaluations.
Thursday ۲nd of January ۲۰۲۵ 27
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