In China, Zinc ingot prices are struggling to rise due to an abundant supply and weak downstream demand. Market prices continue to show downward movement since late April. For the week ending on May 23, prices decreased by 0.5% reflecting subdued market conditions.

Key Takeaways:

• Zinc ingot trading remained slow in late May amid ample supply and low downstream inquiry.
• Export orders, especially in East and South China, picked up due to the release of previously delayed or canceled shipments, providing limited support to the market.

The Zinc Ingot market saw a "wait and see" approach from buyers this week. While some traders resisted price reductions, downstream companies, already holding some inventory from earlier purchases, only bought what was strictly necessary, even with the opportunity to buy at lower prices. This led to a generally subdued trading environment and a subsequent dip in spot prices for Zinc Ingots.

Demand for zinc ingots from end-users was low, largely due to weakening electronic product orders. Additionally, this week brought a 2.86 percentage point drop in the die-casting zinc alloy sector's operating rate, settling at 56.22%. However, the silver lining for some companies was the decline in zinc ingot prices, which they leveraged to slightly increase their raw material inventories. Although export orders, especially from East and South China, saw a rebound from previous delays, this didn't meaningfully impact the broader market.

Zinc ingot supply is currently sufficient, with a significant 37.6% month-over-month increase in zinc ore imports in April, which reached 490,000 metric tons and surpassed market expectations. While the import window for zinc ore remains closed in the spot market, leading to minimal transactions for imported ore, the availability of zinc ingot remains unaffected. Furthermore, both domestic and imported zinc concentrate treatment charges (TCs) are expected to continue their upward trend in June.

The continuous influx of imported zinc ingots has bolstered China's supply. Despite this, traders held firm on prices, keeping spot premiums stable. Low inquiry from downstream businesses led to sluggish spot trading in late May.

Looking forward, Zinc ore supply from the Kyzyl-Tashtyg (Longxing) lead-zinc mine in Russia, is set to continue uninterrupted. Earlier plans to suspend operations in June have been canceled, and the mine will maintain normal production. This decision comes after Zijin Mining's general manager, Li Kaiwen of LLC Lunsin, had previously considered a halt to operations in early May, citing escalating Western sanctions and restrictions on settlements imposed by Chinese banks on Russia.

The prevailing zinc ore supply and a holiday-induced slowdown in demand during the Dragon Boat Festival are set to drive down zinc ingot prices in the immediate future.