Zinc Ingot prices have experienced a downturn in both South Korea and the USA in the lead-up to the Christmas holidays. This decline is attributed to a combination of factors, including increased domestic production, rising inventories, and weakening demand.

In South Korea, Zinc Ingot prices fell by 2% in the week ending December 20. Despite increased trading activity, demand remains subdued. This weakness in demand is primarily driven by diminished consumer spending and a downturn in retail sales, creating a pessimistic outlook for Zinc Ingot prices.

A significant development in South Korea is the completion of Korea Zinc's Onsan Smelter Rationalization Project. This initiative, launched earlier this year, aimed to enhance the smelter's competitiveness. Notably, improvements in the logistics system have significantly reduced associated expenses to KRW 3 billion, a substantial decrease from the previous year. This project is expected to optimize operations and improve efficiency at the facility, further bolstering the Zinc Ingot supply chain.  

Similarly, in the USA, Zinc Ingot prices decreased by 2%. The primary challenge here was reduced demand, a trend anticipated to persist into early 2025. Elevated interest rates have played a significant role in suppressing demand and influencing purchasing patterns. Market participants anticipate a decrease in steel consumption for 2025, which casts a shadow over the prospects of the Zinc Ingot market, as zinc is a key component in galvanizing steel. Recent reports of declining US manufacturing data have further contributed to downward pressure on LME zinc prices, impacting Zinc Ingot prices.

Adding to the supply side, federal authorities in the USA have recently approved the expansion of a key zinc mine in Northwest Alaska. This permit allows for construction to proceed at the Aktigiruq and Anarraaq zinc deposits, extending the lifespan of mining activities in the region.  Further bolstering future supply, Bunker Hill Mining discovered significant zinc-lead-silver mineralization at its Idaho mine. Drilling revealed 14.7% zinc, 5.2% lead, and 2.10 ounces of silver per ton over a 13.2-foot section. Drilling concludes in December 2024, with a new resource estimate expected in Q1 2025 and the mine reopening in H1 2025.

The combination of rising supply in the Zinc Ingot market, driven by increased domestic production in South Korea and mine expansions in the USA, suggests continued downward pressure on prices. While increased trading activity has been observed in some markets, it has not been sufficient to offset the impact of weak demand. ChemAnalyst anticipates downward pressure on Zinc Ingot prices in the near term, at least until demand shows signs of recovery and the impact of increased supply is fully absorbed by the market.