Zinc Prices Recover from Lows: Focus on Changes in Macro Sentiment [SMM Zinc Price Weekly Review]

SMM, January 3:

Price: Bearish funds entered the market during the week, causing zinc prices to fall beyond expectations, hitting a nearly four-month low. Fundamentals side, disruptions at the mine end increased. A fire occurred at the Perilya lead-zinc mine in Australia. According to SMM, the zinc concentrate production of this mine is around 60,000 mt, but the specific impact is currently unquantifiable. Meanwhile, a fire also broke out at MMG's Dugald River zinc mine, but it was promptly controlled, and workers have resumed production, with the overall impact being relatively small. In China, a major mine in Hebei resumed production, coupled with port inventory remaining at high levels, further easing mine supply. Processing fees are expected to continue rising. On the smelting side, production at some northern smelters declined due to technical issues, while some smelters in South China are undergoing maintenance cycles. Additionally, with the approach of the year-end, logistics and transportation have also been delayed, leading to relatively low market arrivals and a further decline in social inventory, providing bottom support for zinc prices. However, some downstream enterprises have gradually entered the holiday period during the week, making weakened consumption inevitable. Subsequently, zinc ingots are expected to enter an inventory buildup cycle. In the absence of significant macro disruptions, the rebound space for zinc prices is expected to be limited. Next week, attention will focus on a series of policy directions following Trump's inauguration.

(The above information is based on market communication and comprehensive evaluation by the SMM research team. The information provided in this article is for reference only and does not constitute direct investment research advice. Clients should make cautious decisions and not replace independent judgment with this information. Any decisions made by clients are unrelated to SMM.)

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