Zinc prices have fluctuated and risen this week

Zinc prices have fluctuated and risen this week

According to the Commodity Market Analysis System of Shengyishe, as of December 18th, the zinc price was 21044 yuan/ton, an increase of 1.70% compared to the fluctuating zinc price of 20692 yuan/ton on December 11th. The expectation of interest rate cuts in the United States, combined with macroeconomic benefits, has led to a volatile rise in zinc prices this week.

Federal Reserve’s expectation of interest rate cuts

On December 13th local time, the Federal Reserve held a meeting of the Federal Open Market Committee (FOMC) to discuss interest rates and issued a statement that the current rate hike cycle may have ended and the rate cut cycle is about to begin: the Federal Reserve will have three 25 basis point rate cuts in 2024. At this point, the Federal Reserve’s most aggressive interest rate hike cycle in decades has begun to shift, and the historic monetary tightening cycle in the United States may come to an end. The Federal Reserve’s interest rate cut signal has boosted market enthusiasm. After the interest rate decision was announced, the US dollar index rebounded and closed higher, while the non-ferrous metal sector rose together.

Macro data is positive

According to S&P’s global market intelligence data, the initial PMI for the Markit service industry in the United States in December was 51.3, a new high since July, higher than the expected 50.7, and a value of 50.8 before November. This is the eleventh consecutive month of expansion in the service industry PMI. The initial value of Markit’s manufacturing PMI in the United States for December fell to 48.2, lower than the expected 49.5, and was 49.4 before November. This is the lowest number since August this year, reversing the previous expansion trend. The Markit service industry PMI and comprehensive PMI in the United States reached new highs since July in December, while the manufacturing industry PMI continued to shrink. The US economy slightly rebounded in December, ending the year at its fastest growth rate since July. Markit’s service industry PMI and comprehensive PMI have reached new highs since July, which is beneficial for the non-ferrous metal sector, with zinc ingots following suit; However, the PMI of the manufacturing industry has decreased, and the demand for zinc ingots is insufficient, with limited support for the rise in zinc prices.

Future Market Forecast

According to data analysts from Business Society, the expectation of the Federal Reserve’s interest rate cut and the positive support of US macro data have led to a volatile rise in zinc prices this week. However, the weak US manufacturing industry and insufficient demand support in the zinc market have made it difficult for zinc prices to continue rising. Overall, the oversupply of zinc in the market has not changed, and it is expected that zinc prices will experience weak fluctuations and consolidation in the future.