03/05/2024
ZINC DRIVEN MORE BY FUNDAMENTALS THAN BY SPECULATION - SUCDEN
Speculative interests will have a strong impact on the outlook for base metals in the second quarter of 2024, Daria Efanova, head of research at UK-based service provider Sucden Financial, said .
But while other base metals have been driven by speculative demand, the traders have pushed prices higher for zinc in recent weeks, Efanova said.
Though zinc prices have been largely rangebound this year, a strong upside in late March and early April pushed prices to $2,800 per tonne resistance levels.
Sucden predicts that zinc prices will remain slightly elevated due to fundamentals. In addition, Sucden noted the impact of Chinese macro and fundamental factors on the zinc market. China’s zinc concentrate inventory has declined rapidly, falling to a multi-year low, suggesting that there’s just not enough concentrate to be produced domestically.
Also, rising competition of ore mines and tightness in the zinc concentrate have pushed TCs to three-year lows.
Efanova predicted that in the second quarter, the $2,700 per tonne level will remain robust in terms of resistance, and Sucden remains bullish on zinc, while expecting some volatility.