News and Articles

• Zinc prices fell in Week 24 as stronger US jobs data reinforced hawkish Federal Reserve expectations, lifted the dollar and reduced investor appetite for base metals across the non-ferrous complex
• Rainy weather weakened construction-related demand in Week 24, slowing galvanizing activity and reducing downstream zinc purchases from fabricators and processors
• Long liquidation in futures positions added to the Week 24 decline as fund managers reduced base metal exposure in response to the tighter monetary policy outlook
• Prices recovered in Week 25 as a US-Iran framework agreement improved risk sentiment and a weaker dollar made zinc more affordable for international buyers
• Supply concerns from disruptions at Nexa's Peru smelter and Glencore's Kazzinc operations in Week 25 raised tightening fears and provided additional support to the price recovery

Zinc prices moved lower through Week 24 as a combination of macroeconomic and demand-side factors aligned against the market. Stronger-than-expected US employment data released during the week reinforced expectations that the Federal Reserve would maintain a hawkish monetary policy stance, which lifted the US dollar and reduced the attractiveness of zinc and other base metals for buyers operating in non-dollar currencies. The firmer dollar environment prompted investors to reassess their exposure to industrial metals more broadly, and zinc bore a share of that sentiment deterioration alongside other members of the non-ferrous complex.

On the demand side, wet weather across key construction markets slowed galvanizing activity, which is one of zinc's primary end-uses and a sector that provides consistent physical demand during the building season. Galvanizing operators scaled back purchases in Week 24 in response to reduced throughput, and broader downstream buying remained cautious, with buyers covering near-term needs rather than extending coverage. Long liquidation in speculative positions accelerated the decline as fund managers unwound base metal exposure in response to the tighter monetary policy signal, leaving prices without support through the close of Week 24.

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Week 25 brought a reversal as the market's focus shifted from monetary policy headwinds to geopolitical tailwinds and supply-side risk. The announcement of a US-Iran framework agreement improved risk sentiment across commodity markets, reducing the uncertainty premium that had depressed base metal buying through parts of the prior weeks.

The US dollar softened in response to the improved geopolitical backdrop, making zinc more accessible for buyers in key consuming markets and encouraging fresh import interest. Supply developments added a further dimension to the Week 25 recovery. Reports of disruptions at Nexa Resources' smelting operations in Peru and at Glencore's Kazzinc operations raised concerns about zinc concentrate and refined metal output from two globally relevant production sources. Supply tightness concerns, even when prospective rather than confirmed, have historically been sufficient to shift zinc market positioning given the metal's already-thin refined inventory buffers, and Week 25 was no exception as buyers moved to cover potential shortfalls ahead of a period of uncertain production.

For zinc procurement teams, the Week 24 to Week 25 sequence illustrates the dual sensitivity of zinc pricing to macro financial conditions and to specific smelter-level supply events. Buyers with term contracts were insulated from the short-cycle volatility; those relying on spot or index-priced supply experienced the full range of the move across both weeks.