Zinc demand to see ‘modest recovery’ in 2025
In the coming year, zinc demand will be a bigger risk than supply, according to StoneX senior metals analyst Natalie Scott Gray.
Global demand for zinc has been muted this year amid a struggling construction sector in both Europe and Asia, but StoneX predicts a modest recovery in zinc demand for next year.
“Even with [China’s] stimulus and rates [cuts], we are not seeing a pick-up in demand until the second half of next year,” Scott Gray said.
On the supply side, mine production in zinc has fallen to three-year lows, Scott Gray said, after multiple large mines in key producing countries cut production in 2023, partially due to lower zinc prices and rising energy costs.
This has resulted in record low zinc TCs, with many participants concerned that tightness in the concentrates markets will spill into the refined side.
Fastmarkets’ twice-monthly assessment of the zinc spot concentrate TC, cif China was $(50)-(20) per tonne on September 27, unchanged since August 30.
StoneX predicts refined zinc production will fall by 1.3% this year but will grow by 3.3% next year. The company also predicts that higher London Metal Exchange zinc prices, expected demand growth in China due to the stimulus package and expected mine production increases will ease current supply-side issues.
StoneX expects tightness in the market to continue to support prices until the end of the year.
source/fastmarkets.com
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