Zinc price outperforms, China steel demand a strong tailwind

Yet data such as warehouse stock levels suggest further significant gains are unlikely.

Massive stimulus measures by Chinese authorities to offset the damage to economic growth from COVID-19 lockdowns has boosted demand for zinc and steel. Global zinc demand is estimated at around 14 million tonnes this year.

Benchmark zinc prices on the London Metal Exchange touched $2,525 a tonne this month, a gain of 11% since the start of the year compared with nearly 9% for copper and a small loss for aluminium.

Graphic: Zinc outperforms here

“Strong galvanised steel production in China is behind zinc’s rally,” a source at a commodity trading firm said. “But LME stocks are up, meaning weakness outside China and excess supply.”