Solid Demand Fundamentals Strengthen the Market Value of Zinc Sulphate in India
- 12-Aug-2022 5:00 PM
- Journalist: S. Jayavikraman
New Delhi, India: In the Indian domestic market, the price trends of Zinc Sulphate have been observed to be on a bullish run. Russia's invasion of Ukraine and the COVID outbreak in China have exacerbated the complexity of macroeconomic growth and hampered the supply-demand fundamentals of the global energy markets. In addition, the recent heat waves in India have compounded the inflation problem by escalating downstream agricultural commodity prices and sinking output.
As per the data, the Zinc Sulphate price surged by 2.2% last month, owing to solid downstream demand in the regional market of India. The ongoing Kharif planting season has boosted the downstream fertilizer demand, strengthening the market value of Zinc Sulphate among the traders. In addition, on the upstream price front, Zinc prices have demonstrated a six-week high on the London Metal Exchange (LME) after the announcement of squeezed profit margins on the European smelters by Glencore. The company's European custom metallurgical operations have undermined and generated just $19 million in the first two quarters of 2022, further inflicting the Zinc prices in the global market.
Furthermore, the uncertain economic activities have always prompted foreign investors to aggressive trading for key commodities, witnessing a perceived risk in developing economies like India. At the end of the second quarter of FY2022, foreign institutional investor (FII) outflows touched a record high in India, putting downward pressure on the Indian currency. In India, the import rate of crude oil and essential commodities has grown much faster than the export rate, further deteriorating the forex reserves.
As per ChemAnalyst, the soaring upstream Zinc prices are likely to prompt upward cost pressure on the manufacturing costs of Zinc Sulphate. Thus, the manufacturer's quotations are anticipated to surge in the forthcoming weeks. However, the offseason demand will dampen the buying sentiments of the terminal sector, causing headwinds in the Zinc Sulphate market's growth.