Zinc saw a -1.08% drop, closing at 225.2, as news suggesting a slowdown in Chinese manufacturing activity put pressure on prices. The official NBS Manufacturing PMI for China increased somewhat to 49.2 in January 2024, but this is the fourth month in a row that factory activity has decreased due to issues like property fragility, deflationary threats, and headwinds from around the world.
On the other hand, the NBS Non-Manufacturing PMI for China increased to 50.7 in January, marking the highest rate since September and the 13th consecutive month of growth in services activity.
In the absence of a substantial increase in demand for zinc and a shift in focus away from anticipated metal surpluses, it seems improbable that production cuts will result in prolonged price increases. Zinc prices on the London Metal Exchange (LME) briefly increased to $2,615 per metric ton, the highest level in more than a week, following Nyrstar’s decision to halt its Budel smelting operations in the Netherlands due to excessive energy costs. Around 14 million tons of zinc are expected to be supplied globally this year.
