Global Zinc Oxide Prices Slump in June 2023 Amidst Surplus Supply and Waning Demand
- 07-Jul-2023 11:55 AM
- Journalist: Gabreilla Figueroa
In June 2023, the price of Zinc Oxide decreased globally. The bearish market was observed as the price of products decreased by approximately 11% in Asia and Europe by 10.5%, respectively. The decline in product prices can be attributed to multiple factors. Firstly, the global supply of Zinc Oxide increased, primarily driven by China, the largest producer. China's expansion of production capacity led to abundant supply in the market, resulting in downward pressure on prices.
Furthermore, demand for Zinc Oxide slowed down in certain sectors, particularly in the sunscreen market, impacting the overall market growth. The decline in Zinc Oxide prices had implications for both consumers and industry players. Consumers benefited from lower prices as products incorporating Zinc Oxide, such as sunscreens, cosmetics, and pharmaceuticals, became more affordable. However, major producers faced lower profits due to declining prices, highlighting their challenges.
The uncertain outlook of the Zinc Oxide market exerted bearish pressure on prices. Market players responded by focusing on reducing their stockpiles, anticipating sluggish momentum in the upcoming weeks. The weakening purchasing power and the influx of competitively priced import cargoes from overseas suppliers also added to the downward pressure on prices. The global oversupply of Zinc Oxide and its derivatives also impacted the demand for US Zinc Oxide. Moreover, the increase in competition in global markets, driven by oversupply, hindered additional exports, necessitating a further drop in product prices to stimulate the necessary demand. Macroeconomic factors, such as high inflation, negatively affected consumer spending, exacerbating the bearish sentiment in the market. In the derivative sectors, buying momentum weakened as buyers prioritized maintaining minimal inventories and procuring materials only when necessary.
According to data from Chemanalyst, Zinc Oxide prices have experienced fluctuations in the Asian, US, and European markets in June 2023. In Asia, especially in India, the average price of Zinc Oxide declined from USD 1943/MT in May to USD 1729/MT in June. In Europe, the average price decreased from Euro 1520/MT in May to USD 1357/MT per tonne in June.
Looking back, the outlook for the Zinc Oxide market remained uncertain during this month. While the price decline potentially slowed market growth, the increasing demand from emerging markets like China and India may have offset this decline. However, the market was expected to remain volatile due to various factors, including global supply dynamics, industry demand, and overall economic conditions. Close monitoring of the Zinc Oxide market and its pricing trends was crucial for industry players and stakeholders. Fluctuations in prices had significant impacts on both suppliers and consumers. Continued market analysis and strategic decision-making were necessary for businesses operating in the Zinc Oxide industry to successfully navigate these challenging market dynamics.
According to ChemAnalyst, the price of Zinc Oxide may decline globally due to weaker demand over the high supply of the product in the global market.