27.08.202510:05:43UTC+00Zinc Extends Recovery

In late August, zinc futures climbed to $2,800 per tonne, continuing their ascent from the one-year low of $2,520 recorded on April 9th. This uptrend reflects the favorable dynamics for base metals, driven by a weaker U.S. dollar and the potential for production reductions by Chinese miners and refiners. Industrial metals experienced gains on global exchanges following signals from the Federal Reserve hinting at a possible interest rate cut in its September meeting. This development bolstered credit conditions in major economies and exerted downward pressure on the dollar, thereby benefiting dollar-denominated commodities.

Furthermore, there is speculation that output in China may decrease, spurred by Beijing’s initiative to curb metal market capacities in an effort to counteract the nation's deflationary trends. Earlier in the year, Teck Resources reported a 20% decline in Q1 output at its Red Dog mine, while Nyrstar announced a 25% reduction in annual production. These factors align with the shrinking inventories in London Metal Exchange warehouses, which have decreased by 130,000 tonnes since the beginning of the year, now totaling 42,000 tonnes.