Tight Zinc Market Battling Global Growth Headwinds

After two years of stimulus-fuelled gains, zinc prices are off highs as global growth headwinds threaten the zinc demand outlook and broader risk appetite. However, ex-China inventory scarcity, European smelter curbs due to high energy prices, and significant global deficit projections for 2022 should help zinc weather the macro-storm.

China’s COVID Absolutism Roils Metal Markets

Aggressive measures to tackle China’s COVID-19 resurgence have badly hit its economy, but Beijing remains resolutely committed to its zero-COVID approach. Along with a soft stimulus-response and deepening property sector weakness, this has undermined commodities demand prospects and triggered a pullback in prices. China’s supply-chain issues risk exacerbating global inflationary pressures and accelerating policy tightening by central banks.