Zinc prices rose by 0.89% at 266.95 due to improved demand in China and a weakening dollar, along with expectations of an imminent US interest rate cut. The decrease in zinc inventories in warehouses and higher energy costs, which account for a significant portion of zinc production expenses, also supported prices.
Positive economic signals from China, including a step back from deflation, also boosted sentiment across equities and commodities markets. The US unemployment rate rose to 4.3% in July, indicating a weakening labor market and increasing the likelihood of Federal Reserve interest rate cuts starting in September.
Supply concerns also contributed to the price rise of zinc, with MMG Ltd halting operations at its Dugald River mine in Australia for repair work. This supply disruption, coupled with a falling global zinc market surplus, reflects the market’s tightening fundamentals.
