Market and product

Zinc prices are likely to rebound in Oct’15 following Glencore's announcement about output cut, according to Angel commodities.

Glencore announced that it will cut 500,000 tonnes of annual zinc production, equivalent to around four per cent of global supply, in its latest response to weak commodities prices.

“The move is significant enough to swing the zinc market into a deficit for 2016 from surplus estimated earlier,” Angel says.

In Sep’15, Zinc prices on the LME plunged the most by around 7 percent deficit hopes eased following build-up of Zinc stocks at LME warehouses in New Orleans by nearly 175,000 tonnes in Aug-Sep’15, jumping by almost 60 per cent over the past month.

This demonstrated the substantial amount of zinc that can be quickly dumped into the market, thereby increasing the likelihood of zinc market moving to balance or surplus in 2015.

Confirming the same, latest metals balance report by the World Bureau of Metal Statistics (WBMS) showed that the worldwide zinc market has recorded a marginal surplus of 219 kt during January to July 2015 as compared to deficit in 2014.