Zinc futures declined to $3,720 per tonne, their lowest level in six weeks, pressured by weak demand in China and a stronger US dollar. According to Shanghai Metals Market, orders at traditional galvanising plants remain subdued, with new bookings insufficient to offset the slowdown, while operating rates dropped sharply around the holidays. The firm US dollar has further dampened sentiment by making dollar-denominated commodities more expensive for buyers using other currencies.
Despite this, zinc prices continue to find support from constrained supply. China’s zinc production fell in August for the first time in nearly a year, as smelters underwent maintenance and miners faced disruptions and unfavourable spot treatment charges. Output has also declined at major global operations, including Peru’s Antamina and Alaska’s Red Dog mines, as producers navigate lower-grade sections of their ore bodies. Inventories on the London Metal Exchange remain historically low, and physical tightness is particularly pronounced across Western markets.
