For the Quarter Ending December 2022
North America
Due to continuous slow end-user demand in the US, the Zinc ingot market declined in the fourth quarter of 2022. Imports were restricted in the mid-quarter due to China's Golden Week holiday leading to a shortage of material available in the US market. According to market analysts, during the quarter, ongoing supply disruptions, high inflation, and China's zero-COVID policy helped alleviate general concerns about a recession and dampen hopes for a rebound in the United States. The US supply chain, however, showed a steady improvement later in the quarter as the recessionary fears eased and the ports experienced a significant drop in ship backlogs after a prolonged port backlog.
Asia-Pacific
In the fourth quarter of 2022, the domestic Zinc ingot market in China showed stagnancy despite the rising raw material prices. The export orders for China's industry producing Zinc ingot declined steadily in the mid-Q4 of 2022 due to the shutdown of industrial facilities for the Golden Week and staff shortage. The situation was further worsened by another rise in covid cases and consequent lockdowns. Consistent end-user industry demand during the fourth quarter has been mostly blamed for the overall pricing trend. Because they had enough inventory on hand, domestic producers and suppliers were able to meet all domestic demand for the whole quarter. Christmas holidays and the approaching Spring festival declined the market demand and industrial output.
Europe
The market prices of Zinc Ingot in the fourth quarter of 2022 followed the uptrend in the European market on account of increasing demand and limited inventories level in the regional market. Major manufacturers had to halt the operational rate in the German market due to elevated energy prices along with staff members. The manufacturers claimed that the price rose in order to meet the upstream industries' increased production costs as a result of rising energy prices. It was challenging for mills to reach their goal prices due to low demand from distributors and end users, notably the automotive industry, as well as from competitors' import offers. Due to the lack of end-user demand, however, spot buyers have not expressed much interest in making a purchase.
For the Quarter Ending September 2022
North America
In North America, Zinc Ingot prices witnessed a falling trend in the third quarter of 2022 amidst a weak demand outlook. In an inflationary environment, the US Federal reserve system raised the interest rates and kept them at a high level for an extended period. Furthermore, European zinc smelters have reduced output in response to recent increases in energy costs. Zinc prices varied depending on the mill and supplier. Throughout the quarter, the demand for the product declined. Lower Zinc Ingot demand was persistent due to economic uncertainty and a weak automotive sector. Towards the quarter's end, the final prices of Zinc Ingot were USD 3160 per MT, CFR Illinois.
Asia Pacific
In the Asian market, the Zinc Ingot prices showcased mixed sentiments throughout the third quarter. The fell in the early quarter due to the weakening overseas demand amidst the economic recession. Despite the effects of power rationing fading, the zinc oxide industries remained sluggish. Furthermore, traders significantly reduced premiums due to more locally available sources and an influx of low-cost sources. The Chinese market transaction was moderate overall. The operation of zinc smelters in Sichuan (China) decreased, as the supply of zinc on the market also slowed down in the regional market. Towards the quarter end, the prices of Zinc Ingot prices were assessed at USD 3566 FOB Tianjin (China).
Europe
In the European market, the Zinc Ingot prices followed the uptrend in the third quarter of 2022 amidst soaring energy costs and squeezed manufacturers' profit margins. Zinc market players showcased no signs of diminishing the prices in the European market as long as the conflict in Ukraine continues. Higher energy prices impacted the production cost, which relies heavily on zinc in the form of galvanized steel. Following Glencore's (GLEN.L) warning about an ongoing margin squeeze at its European smelters, zinc prices on the London Metal Exchange (LME) surged towards the quarter end. In Germany, the prices were assessed at USD 3945 per MT, FOB Hamburg, towards the third quarter end.
For the Quarter Ending June 2022
North America
During the second quarter of 2022, the Zinc Ingot prices witnessed mixed sentiments. Zinc Ingot's price skyrocketed over the first half of the Q2 of 2022 until May, then plunged in June. Zinc premiums in the United States reached all-time highs in May, owing to intense competition with Europe for available units and lower-than-expected output. Throughout the quarter, the extensive supply chain and prolonged port interruption hampered the supply system. Multiple ports were congested, with empty store shelves, idle plants, and billions of dollars in goods stuck in overburdened distribution networks. In addition to the combative signals from the US Fed, which signaled an interest rate hike and a reduction in the balance sheet in May, a lingering COVID pandemic in China had affected many aspects of the country, including transportation, demand, and other areas. After May, supply and demand began exacerbating as imports were restricted due to Chinese lockdowns.
Asia Pacific
Zinc ingot prices in the Asia Pacific region in Q2 2022 were volatile for various reasons. Prices in China increased slightly in the first half of Q2 due to higher zinc prices caused by the ongoing Russian invasion of Ukraine, which forced numerous zinc smelters to halt or reduce zinc production. Fears of a collapse in the economy 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. Exports continued to be impacted as the SHFE/LME pricing ratio improved in the second half. After May, the China producer pricing index (PPI) fell to 8%, the market turned negative, and prices became limited due to lower-than-expected downstream orders. Demand headwinds were generated by China's zero-COVID tight policy, energy-driven inflation, rising real US rates, and a strengthening dollar.
Europe
Zinc ingot prices in the European market showcased a sluggish trend during the second quarter of 2022. Despite the deterioration of the European market, premiums remained high as ongoing logistics issues weighed on regional consumer demand. Due to Europe's limited supply and logistical issues, zinc Ingot prices remained noticeably high this quarter. Customers are beginning to request order delays from [the third quarter] until 2023, indicating potential fragility. The downstream industries' offtakes remained consistent throughout the quarter, further strengthening the demand outlook. This was reflected in the Italian zinc market, where premiums fell from a record high during the second week of June, owing to a rise in bearish sentiment and weakening demand. As per market players, the premiums remained high for the remainder of the year, making it difficult for consumers to operate due to rising costs, such as energy.
For the Quarter Ending March 2022
Zinc Ingot prices rose in the first quarter of 2022 across the North American region. Zinc prices soared beyond USD4,000 per tonne in the second part of Q1 to a 15-year high, propelled by increased energy costs and supply concerns. In mid-February, the price of zinc ingot was set at USD3520 per metric tonne. On March 7, the three-month zinc contract traded on the London Metal Exchange (LME) soared to USD4,247 per metric tonne, the site's highest price since records began in 2007. Zinc metal prices, on the other hand, have declined since their high on March 7, although they are still 7% higher than they were at the start of the year.
In the Asia Pacific region, the price trend of Zinc Ingot witnessed a marginal increment in Q1 2022 after the prices escalated from USD3305/mt and USD3375/mt from January to March 2022. Shanghai Metals Market (SMM) concluded with gains in overnight trading on Friday, March 11 in China during the first half of 2022, after the Federal Reserve signalled robust measures to combat inflation in the country. According to the SMM survey, domestic refined zinc output fell more than predicted in February due to a number of issues, including normal maintenance at some smelters in Yunnan and production unit suspensions due to Spring festival holidays. Overall, domestic smelters resumed steady output following the second week of February, adding to the market's supply. On the demand side, the end-user automobile and pharmaceutical industries saw significant offtakes throughout the quarter.
