Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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November 2019 | Base Metals

Zinc: Scene set for end-of-year volatility

There was a bearish bias at LME Week toward the outlook for zinc given rising supply and weak demand. This is no surprise, but there could be some surprises in the nearer term as fresh cancellations in the past week have reduced available LME stocks to less than 30,000 tonnes, potentially setting the scene for a volatile end-of-year squeeze for prices and spreads.

Data remains weak, but provides some glimmers of optimism
The latest round of Purchasing Managers’ Indices showed activity in the manufacturing sector remains weak, contracting for a the sixth successive month in October. However the JPMorgan Global Manufacturing PMI read of 49.8 showed activity within the sector deteriorated at a slower rate, and suggests the downturn may have bottomed out in July.

HDG producer margins fall, but not enough to trigger cuts

Nonetheless HDG prices have come under increasing pressure in recent weeks. Indeed prices have not been under such downside pressure since late 2015. However, based on...


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