For the Quarter Ending June 2023


North America:

In the second quarter of 2023, Zinc Ingot prices in North America experienced a notable decline, primarily driven by reduced demand from the construction and automotive sectors. The construction industry witnessed a slowdown due to seasonal factors, with the arrival of the monsoon affecting construction activities negatively. This decline in construction activity led to decreased demand for Galvanized steel, ultimately increasing Zinc Ingot inventories. Economic instability, stemming from a debt crisis caused by the downfall of major banks in the USA, further contributed to the pessimistic sentiment in the Zinc Ingot market. Rising inflation both domestically and globally added to the market's gloomy outlook. Meanwhile, Zinc feedstock inventories remained high as mining activities intensified, including the Tala Hamza Zinc Project by Terramin Australia Limited and Sibanye Stillwater's acquisition of the New Century Zinc mine in Queensland. Additionally, Orion Minerals, a global mining exploration company, increased its extraction rates through several new mining agreements. The automotive industry in North America faced reduced consumer demand due to the challenging economic conditions, hindering residents' purchasing power for vehicles. Moreover, decreased consumption of natural gas and fuel, driven by rising inflation, resulted in lower fuel prices, reducing energy costs for Zinc Ingot production in local smelting mills. This decline in production costs contributed to a decrease in Zinc Ingot prices in the US spot market. Uncertain economic conditions and weak downstream demand prompted buyers to refrain from placing large orders, compelling local Zinc Smelting units to lower their offer prices for Zinc Ingot.

Asia:

The second quarter of 2023 saw a downward price trend for Zinc Ingot in Asia, reflecting a dampened global economic condition. An increase in mining activities in countries like Australia and Peru led to an augmented supply of raw material feedstock. Sibanye Stillwater's acquisition of the New Century Zinc Mine in Australia and Polymetals Resources' efforts to resume production in the Endeavor Zinc-Silver-Lead mine in New South Wales contributed to this increased supply. The expansion of mining operations, including the Tala Hamza Zinc Project with permits granted to Terramin Australia Limited, led to higher feedstock Zinc inventories, prompting Zinc smelting mills to reduce their offer prices. The downturn in the global economy also impacted the construction sector, reducing the use of Galvanized sheets and, subsequently, demand and prices for Zinc Ingot. In South Korea, mid-sized construction companies faced challenges due to rising prices of other raw materials like concrete and cement. South Korea's economy was on a declining trend, narrowly avoiding a recession, with GDP growing by a mere 0.3% in Q1, primarily driven by improved trade and consumption. Uncertainty and economic decline led buyers to be cautious about placing large orders. The combined effects of reduced downstream construction demand and increased feedstock Zinc mining activity created a pessimistic market sentiment, prompting local Zinc smelting mills in South Korea to lower their offer prices.

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Europe:

In the second quarter of 2023, German Zinc Ingot prices continued to decline steadily as inventories remained high and consumer demand dwindled. The market sentiment for German Zinc Ingot was sluggish, influenced by elevated production rates at the Glencore Nordenham plant, a significant player in the German Zinc industry. Additionally, increased production at the Portovesme plant in Italy contributed to higher inventory levels. Feedstock Zinc extraction rates were rapid, driven by Sibanye Stillwater's acquisition of the New Century Zinc mine in Queensland and Orion Minerals' increased production from two major projects. Terramin Australia Limited's receipt of a permit for the Tala Hamza Zinc Project led to a surplus supply of imported Zinc in the German spot market. The deteriorating economic conditions across Europe led to a mid-Q2 recession in Germany. The latter half of the second quarter faced challenges as rising inflation affected local buyers' purchasing power. The labor crisis in Europe further reduced construction and infrastructure development activities in the German spot market. Buyers hesitated to place large orders, awaiting clearer price indications for Zinc Ingot. The combined impact of high inventories, reduced demand from downstream construction and automotive sectors, and economic uncertainty contributed to the declining market sentiment, prompting buyers to seek lower prices.




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