- LME zinc inventories drop, suggesting tight supply
- US Fed policy, US-China trade tensions pressure tags
The London Metal Exchange (LME) zinc market experienced price volatility and fluctuating sentiment during Week 32 (August 11-15, 2025), with the market navigating conflicting signals from declining LME inventories and evolving macroeconomic indicators.
Price trends
LME zinc cash-settlement prices edged higher w-o-w while facing volatility. Prices opened at $2,803.50/t on 11 August and then witnessed some fluctuations throughout the week, reaching a high of $2,841.50/t on 13 August before settling at $2,811.50/t on 15 August.
The three-month LME zinc contract mirrored this pattern, opening at $2,809.00/t on 11 August, reaching a peak of $2,846.00/t on 13 August, and closing at $2,814.00/t on 15 August.
While there was some upward momentum early in the week, prices eased towards the end due to factors such as unexpectedly high US Producer Price Index (PPI) data, which dampened expectations for immediate Fed interest rate cuts. The market was also influenced by reports of US-China trade tensions being extended again.
LME zinc inventories continued their downward trend during the week, from 80,425 t on 11 August to 76,325 t on 15 August. LME-registered zinc inventory fell to a two-year low of 78,475 t on 13 August, with available stocks even lower at 45,700 t. This continuous decline indicates a tightening global supply of readily available zinc. The majority of these stocks were located in Singapore.
MCX zinc trends
MCX zinc futures opened the week lower at INR 270,350/t on 11 August. However, prices soon rallied, with the September contract closing at INR 271,700/t, up 45 paise or 0.17% on 11 August, supported by a pick-up in spot demand.
On 14 August, zinc prices fell 0.06% to INR 269,800/t in futures trade, as speculators reduced their exposure, tracking negative cues from the spot market.
MCX zinc futures were trading around INR 268,300/t on 18 August, suggesting a somewhat muted performance after the fluctuations of the previous week.
Hindustan Zinc becomes first Indian ICMM member
On 12 August 2025, Hindustan Zinc Limited, India’s largest integrated zinc producer, joined the International Council on Mining and Metals (ICMM), becoming the first Indian company to do so and ICMM’s first new member since 2021. Following a rigorous independent review, HZL expressed commitment to ICMM’s 40 ESG performance expectations, targeting net-zero emissions by 2050. This milestone reinforces HZL’s leadership in sustainability, innovation, and responsible mining while amplifying India’s role in shaping global ethical resource development.
Outlook
The outlook for zinc remains uncertain, as the market is grappling with conflicting signals. While declining LME inventories indicate tightening supply, the continued build-up in Chinese inventories due to weak demand is a significant bearish factor. The macroeconomic environment, particularly US Fed policy and ongoing trade tensions, will likely dictate short-term price direction. Regional demand dynamics and the SHFE/LME ratio will continue to influence market direction and sentiment in the coming weeks.
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