Will zinc prices rise again in the second half of the year?

The zinc market saw a sharp boost last year on speculation about the closure of major global mines, raising fears of a cut in ore supplies. Discussions about the closure of mines are likely to push the top of the zinc price in the second half of this year. However, this process can be influenced by other factors as well.

Now on the London Metal Exchange LME, zinc prices have fallen on the back of the US dollar, but zinc has outperformed other base metals. China's growth in the second quarter unexpectedly exceeded market expectations, helping to ease investor fears. On the LME, zinc prices opened at $ 2060 /t on Wednesday and rallied to hit a month high of $ 2117.5 /t. But Fed Chair Janet Yellen said they will raise interest rates later this year on positive US economic indicators, pushing up the US Dollar Index and lowering metals.

As a result, LME zinc prices have rebounded from their early gains. Trading volumes increased and LME zinc inventories declined. On the Shanghai SHFE Futures Exchange, zinc contract prices opened at 15780 yuan a tonne on Wednesday evening, then slid to 15700 yuan a tonne and closed at 15665 yuan a tonne. Trading volumes have increased. Zinc stocks in Shanghai declined slightly in the past week, mainly due to fewer inbound shipments.

Investors will keep a close eye on the Eurozone Consumer Price Index (inflation index), CPI June, as announced by the President of the European Central Bank. A weaker euro will strengthen the US dollar index, affecting base metal prices. LME zinc prices should move between $ 2060-2090 per tonne, while SHFE zinc contract prices will hover between RMB 15580-15680 per tonne.