For the Quarter Ending June 2023
The market for Zinc powder in North America displayed a stagnant price chart during the second quarter of 2023. Between April and June, CFR California prices modestly slipped from $4280 per metric tonne to $4250 per metric tonne, a fall of -0.7% over the quarter. The United States market commenced the second quarter on a positive note as the economy got better considering the fall in inflation rate by almost 5%, the lowest level in two years. However, stats still show the economy slowing substantially in the second half of 2023. Lower demand for pharmaceutical-grade Zinc Powder was seen in the USA as downstream nutraceutical and pharmaceutical companies stocked up. However, the country's Nutra sector showed an uneven market action pattern, driven by divided opinions on the cost of supplements. Although both market conditions and trading dynamics improved in the US, weaker inquiries for zinc across the country led distributors to offer it at lower prices. Inflationary pressures and the weak recovery in China dented confidence and dampened demand for zinc in the US," said one industry source. "We did not expect the zinc price to fall so low as to force mine closures this year." They added in a statement.
The Zinc powder market in the Asia-Pacific region showed a mixed pattern of price movements in the second quarter of 2023. EXW Shanghai prices first rose from $3870/t in April to $3920/t in May and then fell to $3790/t in June. This price decline started in the last weeks of May and became quite relentless as the demand for zinc powder from the downstream pharmaceutical and nutraceutical sectors declined globally and domestically. Chinese zinc powder producers were forced to sell the product at lower margins as both demand and consumer inquiries weakened. According to the Stats, China's manufacturing activity contracted for the third consecutive month in June, but at a slower rate. The June PMI also showed a number of imbalances and weaknesses, such as continued losses in both domestic and foreign demand, accelerating declines in business activity, and increasing pressure on the country's pharmaceutical and nutraceutical industries. In view of the state of the Chinese economy, manufacturers and sellers were cynical and produced products on the basis of demand.
In Europe, the zinc powder market showed stagnation in the second quarter, with prices initially rising in the first half and then falling in the second. Lower demand from downstream industries combined with large supplier inventories was one of the main reasons for this price reduction in the second half of the quarter in the German domestic market. In April, the cost of gas for power generation in Europe reached its lowest level since the beginning of the crisis. On the other hand, the market environment was severely affected by an unexpected rise in the unemployment rate in Germany in the month of June. Retailers stockpiled zinc powder to prevent potential future shortages, forcing them to reduce their margins later in the quarter to clear their inventories. German inflation rose again by more than 6% in June, but the country's Zinc Powder industry has not yet been affected. As in the rest of the world, market participants are treading water and remain skeptical about the country's economic situation.
For the Quarter Ending March 2023
During the first quarter of 2023, the price trend for Zinc powder showed an increased tendency, with CFR California prices rising from $3913 per MT in January to $4250 per MT in March. Industry experts had predicted that the end-user F&B, pharmaceutical, and nutraceuticals industries would continue to navigate through mixed sentiments during the first quarter of 2023, given the market turbulence in the preceding quarter. The market dynamics in the US were kept in check, though, by continuous end-user demand for Zinc powder throughout the quarter and reasonable inquiries from downstream suppliers. Retailers in the United States benefited from the decrease in ocean shipping costs for imports in the second part of the quarter. When demand was high, carriers concentrated on the most profitable cargo and made record profits.
Zinc Powder market growth in the first quarter of 2023 was promising in the Asia Pacific region. When China decided to suspend the COVID-19 restrictions during the first week of January, the multitrillion-dollar economy, which had been struggling greatly over the previous four years, received a lift. Prices in China rose steadily from $3258 per MT in January to $3770 per MT in March EXW Shanghai in the first quarter of 2023. Following a one-week Lunar Holiday, the price of zinc powder in the local market for food, beverages, nutraceuticals, and pharmaceuticals witnessed a roll-over sentiment for two consecutive weeks in January. Throughout the quarter, the Demand and Supply picture also remained positive.
The first quarter of 2023 saw a robust start for the nutraceutical industries in Europe, thanks to an increase in orders and shipments from both domestic and international markets. Participants in the local market typically experienced positive arbitrage because Zinc Powder received frequent orders from the end-use market. The surprise reopening of China's COVID and the continued conflict between Russia and Ukraine lessened inflation pressures even though the European market seemed to be heading in the right direction.
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.
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.