Zinc prices have fluctuated and fallen this week

According to the Commodity Market Analysis System of Shengyishe, as of January 15th, the zinc price was 21240 yuan/ton, a decrease of 071% compared to January 8th, when the zinc price was 21392 yuan/ton; Compared to January 1st, the zinc price of 21588 yuan/ton decreased by 1.61%. Geophysical risks have intensified, expectations of interest rate cuts in the United States have weakened, and the zinc market continues to be weak. Zinc prices have fluctuated and fallen this week.

Increased geopolitical risks

Since mid December 2023, Yemeni armed militants have attacked ships and seized the important “throat” of the Red Sea. The Red Sea crisis has erupted. On the early morning of January 12, 2024 local time, Britain and the United States launched an airstrike on the armed control area of Yemen’s Husai. The Red Sea crisis is intensifying. The prices of crude oil and gold have risen together, driving the non-ferrous metal sector to slightly recover. But the chain reaction triggered by the geopolitical crisis in the Red Sea has had an impact on the global shipping market and supply chain system, exacerbating expectations of global economic weakness. The rise in zinc prices is weak.

Weakened expectations of interest rate cuts

In December, the number of non farm employment increased by 216000 people beyond expectations; The unemployment rate of 3.7% was lower than expected, and the overall CPI in December was higher than market expectations. The year-on-year growth rate of core CPI has slightly declined but exceeded expectations, and the month on month growth rate has accelerated to 0.3%. The year-on-year growth of PPI in December was 1% lower than expected, while the core PPI remained unchanged on a month on month basis, marking the smallest year-on-year growth rate since the end of 2020. The prospect of interest rate cuts remains shrouded in mist. On Monday, Vishwanath Tirupatur, Global Head of Quantitative Research at Morgan Stanley, posted that the Federal Reserve is more likely to start cutting interest rates in June than the market had previously expected in March. The recently released employment and inflation data, as well as recent speeches by the Federal Reserve, all suggest this path. The expectation of the Federal Reserve’s interest rate cut has weakened, the US dollar index has risen in the short term, the non-ferrous metal sector is bearish, and the downward pressure on zinc prices has increased.

Future Market Forecast

According to data analysts from Business Society, the Red Sea crisis has intensified concerns about economic weakness, with uncertain expectations of the Federal Reserve’s interest rate cut, a weakening US dollar index, and a bearish outlook on the non-ferrous metal market. Overall, the zinc market has sufficient supply and weak demand; Expected weak and volatile zinc prices in the future.