Zinc Ingot Prices Decline Globally in July, Hit by Supply and Demand Shifts

The first half of July, the global Zinc Ingot market has experienced notable price declines across various regions, driven by complex supply and demand dynamics. In the USA, Zinc Ingot prices fell due to market saturation from high interest rates and raw material availability, compounded by rising freight costs and proposed import tariffs, which dampened purchasing activity.  Meanwhile in Germany's Zinc Ingot market was similarly affected, with a decrease in demand from the automotive sector, particularly for hybrid and electric vehicles. This drop in demand from key downstream industries has significantly impacted Zinc Ingot prices. Moreover, in China Zinc Ingot prices dropped due to increased inventory in the Shanghai Bonded Zone and the suspension of operations at MMG Ltd's Dugald River zinc mine in Australia. The ongoing debt issues in China's construction sector and the anticipation of potential stimulus measures from Beijing have added to market volatility.

As of July 12th, Zinc Ingot prices in the USA fell by 0.7% due to disruptions in supply and demand. The increase in Zinc Ingot supply was driven by high interest rates and the availability of raw materials, resulting in market saturation. However, rising freight costs affected trade routes and buyer interest negatively. Uncertainties arose from proposed import tariffs, complicating the supply chain dynamics. Purchasing activity decreased due to challenges such as higher shipping costs and the anticipation of import tariffs. The construction sector, a major consumer of Zinc Ingots, showed signs of slowing down with reduced spending and prices. Weak activity among American mills reflected low market demand, leading to a decline in Zinc Ingot prices.

At the end of the week on July 12th, Zinc Ingot prices in Germany fell by 0.8% due to decreased demand from downstream industries. In Germany, demand for Zinc Ingots is notably affected by the automotive sector, particularly with respect to hybrid and electric vehicles. Recent data shows a decrease in the registration of these vehicles, leading to a lower demand for zinc ingots. The drop in demand from key downstream industries like automotive has directly impacted the Zinc Ingot market. The market for Zinc Ingots is sensitive to broader economic indicators and trends, despite challenges in the industrial sector. The performance of hybrid and electric vehicles, which heavily rely on zinc for corrosion prevention in automotive applications, plays a crucial role. Reduced demand from this sector is a major factor contributing to the recent price decrease. Moreover, geopolitical, and corporate events continue to influence the supply side of the Zinc Ingot market. One significant event is related to UK-based Vedanta Resources, the parent company of India's Vedanta, which settled dues to support the revival of operations in the Konkola copper mines (KCM) in Zambia.

With the week ending on July 12th, Zinc Ingot prices in China dropped by 0.9% due to disruptions in supply and demand. Significant changes have been witnessed in the Zinc market's supply side, with inventory in the Shanghai Bonded Zone rising. This increase in stock is a result of the anticipation of the import window reopening, leading to a downward pressure on prices. Moreover, the suspension of operations at MMG Ltd's Dugald River zinc mine in Australia for repair work has further impacted the supply scenario. Additionally, Weak demand for zinc ingots is influenced by various factors, such as ongoing debt issues in China's construction sector, a major zinc consumer. Investor focus is currently on potential stimulus measures from Beijing to support the country's troubled property market at the upcoming Third Plenum, although specific details are awaited. This market fluctuation highlights both volatility and investor caution in the industry.

According to ChemAnalyst, Zinc Ingot prices in the USA are expected to rise due to increasing demand across various downstream sectors. The construction industry may show signs of a potential resurgence, which could stimulate buying activity and drive prices higher. Furthermore, Germany's government might explore initiatives to support its domestic zinc ingot industry, which could potentially drive a global price increase. At the same time, the growth of China’s automotive sector could result in a significant rise in global demand for zinc ingots.