FX.co ★ Zinc Eases from 6-Week High

Zinc futures recently settled at $2,700 per tonne, retreating from a nearly six-week peak of $2,790 reached on May 14th. This shift is attributed to increasing macroeconomic uncertainties, which have tempered expectations for the demand in the galvanization sector, the primary industrial application of zinc. Although there was a temporary easing of sanctions between the US and China, the absence of substantial agreements and the continued enforcement of Washington's reciprocal tariffs have sparked concerns. These trade barriers threaten the demand within China's key durable goods sector, which significantly contributes to the stainless steel market. Despite these concerns, supply constraints have prevented futures from dropping to the one-year low of $2,515 experienced in early April. Production at Teck Resources' Red Dog Mine in Alaska, the world’s largest zinc mine, is nearing depletion and reported a 20% annual decline, producing only 145,300 tonnes in the first quarter. Moreover, Nyrstar, a leading Australian smelter, has announced a 25% reduction in this year's output, driven by ore shortages that have caused treatment charges to fall, rendering them uncompetitive.