For the Quarter Ending December 2022
Zinc Powder market growth was observed in the fourth quarter of 2022 as a consequence of sustained end-user demand in the US. Between October and December, Zinc CFR prices in California increased from $3750/mt to $3960/mt. The Golden Week vacation in China caused imports to be restricted during the first week of October. Market analysts claim that during the quarter, persistent supply interruptions, excessive inflation, and China's zero-COVID policy all contributed to stoking broad recession worries and lowering recovery expectations in the United States. Prices for Zinc increased as China relaxed some COVID requirements, which raised expectations for a resurgence in demand in the second half. As risk assets rose and US inflation slowed as a result of loosening Chinese controls, Wall Street saw a rise. However, as the economy started to expand and the ports had a substantial decline in ship backlogs following a protracted port backlog, the US supply chain saw a steady improvement later in the quarter.
The domestic Zinc Powder market in China demonstrated an upward market momentum in the fourth quarter of 2022, with EXW Shanghai prices rising from $2910/mt to 3320/mt from October to December. Due to the closure of industrial facilities for the Golden Week, the export orders for China's industry producing Zinc Powder decreased steadily during the first week of October. The overall price trend has been largely attributed to consistent end-user industry demand throughout quarter 4. Domestic suppliers and producers were able to satisfy all domestic demand for the entire quarter as they had sufficient stocks on their shelves. Prices of metals, particularly Zinc, rose as China loosened some COVID regulations, raising hopes for a recovery in demand in the second-largest economy in the world.
The European Zinc Powder market continued to incline in the 4th quarter of 2022, with values coming to the assessment price of $3870/mt during October. Although rising energy and raw material costs made it difficult for the pharmaceutical and nutraceutical businesses to contemplate, demand remained on the positive side. Germany's industrial production increased just a little in October despite rising energy prices and supply-chain issues. However, COVID-19 issues as well as the conditions in Russia and Ukraine, all continued to have a detrimental effect on output.
For the Quarter Ending September 2022
The third quarter of 2022 for the North American Zinc powder market started out poorly, with CFR California values assembled at $3420/mt in August. Values later improved, though, and eventually settled at $3510/mt in September. During the first half of quarter three, the weak domestic demand from the end-user industries, such as the pharmaceutical, personal care, and cosmetics sectors, has mostly been responsible for maintaining this price trend in the US. The power shortage in China brought on by prolonged heatwaves in the southern provinces, as well as the heightened operational pressure and shutdown of industrial units, also disrupted the dynamics of the US market in H2. Substantial rate rises by the US Federal Reserve in the second half, which pushed the US currency to fresh 20-year highs, badly damaged business optimism globally. Gains in metal prices were constrained by a strong dollar, which was bolstered by predictions of a major interest rate increase following an unanticipated spike in US consumer prices in August that affected the value of the nation's zinc powder.
Zinc Powder Values in China deescalated during the first half of the third quarter, with EXW Shanghai discussions reaching a settlement at $2520/mt, but they later effectively increased and reached a settlement at $2660/mt in September. The first half of the quarter saw a decline in demand from the end-user sectors in the local Chinese market. According to analysts, despite the greater price of coal, Chinese producers were still not making a lot of money. This lower price trend in China has been supported by both increased operating pressure due to insufficient market demand and a power deficit brought on by prolonged heat waves in the southern regions. In order to address the spot supply crunch in the domestic market, some smelters exported their products during the second half of this quarter, which increased the number of arrivals in the Shanghai market. This has had a favorable impact on the price trend of the Chinese market for Zinc powder. The last several weeks saw significant reductions in China's zinc production due to power problems, along with brief interruptions brought on by rationing in Sichuan province this month.
In the European region, the price trajectory of Zinc Powder mimicked the market trend of North America, with values settling at $2940/mt in July. The prolonged energy crisis, rising inflation, and ensuing worries about the outlook for economic growth caused the most significant drops in Europe during the third quarter. The biggest driver of inflation was still the cost of energy. Germany's logistical issues as a result of ongoing transportation bottlenecks exacerbated the third quarter's economic downturn. The situation in Europe deteriorated because of the ongoing port closures in China and the unrest in Russia and Ukraine. Due to the sluggish demand from end users of pharmaceutical and nutraceutical products, domestic retailers lowered their prices in the second part of the quarter.
For the Quarter Ending June 2022
The value of Zinc soared over the first half of the second quarter of 2022 until May, and then it started to fall in June. Due to intense rivalry with Europe for available units and lower-than-expected output, zinc premiums in the US reached all-time highs in May. However, the extensive supply chain and prolonged port interruption continued obstructing the supply system throughout the quarter. Multiple ports were observed congested, with empty store shelves, idle factories, and billions of dollars worth of goods stuck in overloaded distribution networks. A lingering COVID pandemic in China has affected many elements of the country, including transportation, demand, and other areas, in addition to the combative signals from the US Fed, which in May signaled both an interest rate hike and a reduction in the balance sheet. After May, supply and demand both began to deteriorate as imports were curtailed due to lockdowns imposed in China.
Zinc powder prices in the Asia Pacific region in Q2 2022 showed conflicting feelings for several reasons. During the first half of Q2, prices in China somewhat increased on the domestic market due to higher zinc metal prices brought on by the ongoing Russian invasion of Ukraine, which forced numerous zinc smelters to halt or scale back zinc metal output. Fears that the economy may collapse in the second quarter of 2022 were sparked by a sharp slowdown in China's economic activity in April when lockdowns severely disrupted employment and industrial production. During the week ending April 29, prices in the market increased slightly as inventory levels in seven of China's major markets decreased. On the other side, declining LME zinc prices upset the market's equilibrium and caused SHFE zinc prices to decline. As the SHFE/LME pricing ratio improved in the second half, exports continued to be impacted. After May, the China producer pricing index (PPI) dropped to 8%, the market turned negative, and prices became limited because downstream orders were less than anticipated. An industry expert said, "Demand headwinds were generated by China's zero-COVID tight policy, energy-driven inflation, rising real US rates, and a strengthening dollar."
The second quarter of 2022 saw bearish sentiments on the zinc market in the European region. Despite the market's weakening, premiums remained high as ongoing logistics problems weighed on regional consumer demand. Due to a limited supply and logistical issues in Europe, zinc prices remained noticeably high over the quarter. According to a market analyst, several logistical obstacles and high energy costs support a high premium level. Customers are starting to ask to delay orders from [the third quarter] until 2023, which is a hint of possible fragility. Offtakes in the downstream industries were steady throughout the quarter, which is good news for the demand side. This situation was reflected in the zinc market of Italy, where premiums moved down from their record level during the second week of June, following a rise in bearish sentiment and weakening demand.
"I am not sure that premiums can maintain these high levels for much longer," one regional trader said. He added that if the premiums stayed high for the remainder of the year, it would be difficult for consumers to operate because of other rising costs, such as energy.
For the Quarter Ending March 2022
The US Zinc market entered the 1st quarter of 2022 with positive sentiments as the CFR California prices escalated slightly from USD3420/mt to USD3490/mt between January and March. As a result of the military confrontation between Russia and Ukraine, trade between the United States and Asia was severely disrupted in mid-H1 of 2022. As the conflict ripples caused delays in the transportation of commodities and spurred higher shipping rates to the already congested ports in the US, several traders were seen keeping a tight eye on freight expenses. The increased demand for Zinc prompted a huge number of businesses to reopen after the CNY holidays, resulting in an increase in the number of orders from the United States. On the back of the uncertainty surrounding the Russia-Ukraine armed confrontation, risk aversion was observed to be rather severe in the second part of Q1. On the demand side, domestic offtakes from downstream sectors remained positive.
During Q1 of 2022, the prices of Zinc Powder improved marginally across the Asia Pacific region. In China, Zinc discussions for FOB Qingdao and Ex-Shanghai got fixed at USD2455/mt and USD2395/mt in the month ending March. Due to the rising number of Omicron variant cases in China, leading producers including NHU and ZMC declared forced closure due to the country’s zero-tolerance policy, which exacerbated the prices of several commodities across the country. In the second half of the quarter, during the Beijing winter Olympics and Spring Festival holidays in China, the demand for Zinc increased significantly from the food and beverage industries, which further supported the price trend in the spot market. The country's increasing energy prices, owing to coal shortages and a zero-tolerance covid policy, as well as pandemic preparedness, prompted delays in coal customs clearance, causing zinc prices to rise across the board. Furthermore, due to the Winter Olympics and the Lunar New Year, there were fewer working days in February, which contributed to the overall lower output.
During the 1st quarter of 2022, the prices of Zinc Powder hopped upwards across the European region on the back of the firm demand. However, lack of supplies somehow disrupted the market sentiments during the quarter. During the second half of first quarter, as the turmoil in Ukraine caused shortages for European industries who rely heavily on Russian supplies, commodity dealers rushed upward to benefit from a once-in-a-lifetime opportunity to transport metals out of China. In Q1, the sharp escalation of a worldwide supply crunch affected European customers the hardest. Furthermore, with global supplies running low, analysts and dealers said the unusual flow of metals from China to Europe only provided temporary relief, while Russian exports remained hampered. The prices of Zinc Powder were fixed at USD2560/mt towards the quarter end.
For the Quarter Ending December 2021
During the 4th quarter of 2021, the market trend of Zinc demonstrated a state of stagnancy across the North American region. The prices of Zinc stabilized in the month of November and settled at USD 3560 per MT CFR California after gaining close to percent in Q3 on the back of weakened supply dynamics. The demand remained consistent throughout quarter 4 by several market participants while remarking that supply fundamentals gained strength in the wake of enhanced supply chains through high logistics availability and stability in fuel costs. The demand for Zinc in the US domestic market is likely to dip following the global demand pattern, which is expected to cause a price decline in Q1 2022.
In the Asia Pacific region, the price trend of Zinc Powder showcased mixed sentiments during the fourth quarter of 2021. In China, market players reported that supplies remained affected in November as Beijing imposed nationwide power curbs due to a slew of factors, including rising coal prices and the nation’s commitment to cut carbon dioxide emission sharply by 2030, which affected the Zinc prices across the country. The shortage of electricity increased the concerns regarding the restart of Zinc smelters, which led to the sharp gains in zinc powder prices in the week ending of November as prices settled at USD 2466/MT FOB Qingdao. The Chinese domestic market was heavily impacted in Q4 by the soaring energy prices power shortages in several provinces as zinc smelting is a major electricity consumer. In the month of December, the increased price competitiveness followed by the surged onboarding activities resulted in a decline in the Zinc prices as the Chinese manufacturers were destocking their inventories ahead of the year-end. In the Indian domestic market, the demand for Zinc remained strong in quarter 4, exceeding the production rate and inventories level of the country. The CFR JNPT prices of Zinc were assessed at USD 3942.60 per MT in December.
In Europe, the domestic market trend of Zinc witnessed an upward trajectory in quarter 4 of 2021 on the back of the strong demand and limited supply. The prices of Zinc reached historical highs across Europe and jumped more than 5% in mid-December on the back of the supply concerns after Belgium-based Nyrstar said it would shutter its plant in France from January due to soaring energy prices.