In the second week of April 2023, the prices of Zinc Ingot witnessed a declining trend, reaching a four-month low owing to the higher inventory levels, coupled with decreasing consumption from the downstream galvanizing industry. As per market players, the global inventory levels remained relatively stable, and Zinc Ingot prices continued to drop due to concerns encircling the state of the global economy and a stronger US dollar. The overall negative market sentiment and lack of momentum led to a fall in Zinc Ingot prices to their fundamental levels. Additionally, weak US manufacturing activity, which hit a near-three-year low in March, added to the downward pressure on Zinc Ingot prices.

In the European market, Zinc Ingot prices remained lower due to the limited downstream consumption and higher inventory levels. The Auby smelter in France resumed operations last month after a period of care and maintenance. However, Trafigura, the controlling company, mentioned that it still faces uncertainties around energy pricing and continues to manage production at its European sites. On the other hand, Glencore's Nordenham plant in Germany and its primary production line at the Portovesme plant in Italy remain on care and maintenance, even though the surge in energy prices from last year has subsided. The unclear outlook for the coming year, particularly next winter, further complicates the economic feasibility of reopening idled capacity. Despite this, the profits of European smelters are gradually recovering, and overseas Zinc Ingot prices are heading downward.

Zinc Ingot prices have remained sluggish in the US market due to decreasing demand from the downstream galvanizing industry. Domestic traders have reported that the downstream industry's Zinc Ingot inquiries are negatively affected by slowing construction demand, depending on the service center. Moreover, the closure of the Flin Flon smelter last year has resulted in a permanent reduction in the North American Zinc Company's refined capacity. The Valleyfield plant, operated by Noranda Income Fund, faces technical problems. Although a six-week maintenance shutdown at the end of last year stabilized operations, the company stated that it "will not fully address underlying operational issues," which might require a more prolonged shutdown. However, the timing for this shutdown will not be before 2024, as options are being evaluated.

In April, several Chinese smelters in Yunnan are scheduled to undergo routine maintenance, while some in Inner Mongolia will be temporarily shut down due to equipment failures. These smelters were expected to resume production in early April. Market players in China consider that the overall supply of Zinc Ingot may not be high this month, although the specific production plan is yet to be announced. In addition, Zinc Ingot Treatment Charges (TCs) decreased by USD 7/MT last week, indicating a tight supply of Zinc Ore. However, downstream enterprises' operating rates weakened due to the Qingming Festival, which impacted demand. The unclear balance between supply and demand will keep Zinc Ingot prices rangebound in April 2023.

As a ripple effect, ChemAnalyst expects Zinc Ingot prices likely to remain rangebound this week due to the sluggish downstream demand. Market players will likely remain cautious and wait for further price dynamics, claiming that the peak season still supports zinc prices. However, despite seasonal demand, Zinc Ingot prices are expected to remain stable.