- Concerns over Chinese demand weigh on prices
- HZL launches EcoZen, Asia’s first low-carbon zinc
The London Metal Exchange (LME) zinc market experienced fluctuations throughout the week, but prices remained stable overall, driven by continued supply-side support and strong global demand, despite tepid consumption in China and an increase in inventories. The market hovered at elevated levels, reflecting underlying bullish sentiment.
Price trends
LME zinc cash-settlement prices opened at $3,190/t on 3 November and closed at $3,190/t on 7 November, showing a flat performance overall.
The three-month LME zinc contract started at $3,087/t on 3 November and closed slightly lower at $3,063/t on 7 November, marking a minor decline. The market was volatile — early-week optimism over trade talks was later tempered by profit-taking and concerns over Chinese demand.
Inventory analysis
LME zinc inventories edged higher, from 33,825 t on 3 November to 34,100 t by 6 November, with a further 3% uptick noted towards the end of the week to 34,900 t on 7 November. However, the market continued to face structural tightness, as reflected in persistent backwardation, indicating limited availability of nearby material and underpinning market strength.
MCX zinc trends (3-7 November)
MCX zinc prices showed a downward trend. The December contract closed at INR 302,100/t on 3 November and declined to INR 298,500/t by 7 November, marking a 1.19% decrease for the week. Indian market sentiment was mixed, balancing global cues and spot demand against potential downside risks.
SHFE zinc trend
SHFE zinc prices mirrored the global rally but faced headwinds from weak domestic consumption. The most-traded SHFE November zinc contract closed 0.47% higher at RMB 22,670/t on 7 November. Despite some strength, persistent concerns over domestic demand and the broader supply-demand balance limited further gains.
Hindustan Zinc launches EcoZen
Hindustan Zinc has introduced EcoZen, Asia’s first low-carbon zinc, featuring over 75% lower carbon emissions than conventional zinc. Produced using renewable energy and certified by global sustainability standards, EcoZen enables the avoidance of around 400 kg of CO2 per tonne of steel galvanised. This initiative marks a major milestone in India’s journey toward sustainable and low-carbon industrial production within the metals sector.
Outlook
The near-term zinc outlook remains cautious. While critically low LME inventories offer strong support, volatility is expected amid uncertainty about Chinese demand sustainability and broader macroeconomic influences. Market participants will closely watch for signs of sustained Chinese consumption, refined supply dynamics, and potential increases in mined output. Developments in trade negotiations and US monetary policy will also be key determinants of zinc price direction.
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