Zinc futures fell to $2,740 per tonne, following a recent peak of $2,790 per tonne reached on June 30th, as inventory levels increased and the market evaluated the demand for galvanization. In the final week of June, zinc stocks at the Shanghai Futures Exchange rose by 800 tonnes, indicating a reduction in deliveries being accepted by manufacturers. This development aligns with ongoing uncertainty regarding factory demand, as reflected by the country's official Purchasing Managers' Index (PMI), which continues to signal a contraction in manufacturing activity.
On the supply side, production from Teck Resources' Red Dog Mine in Alaska, the world's largest zinc mine facing resource depletion, declined by 20% year-over-year to 145,300 tonnes in the first quarter. Furthermore, major Australian smelter Nyrstar announced plans to reduce its annual output by 25% due to a shortage of ores, which has led to treatment charges dropping to an unviable level.
