Zinc Falls on Strong Dollar
Zinc prices fell below $3,800 per tonne to their lowest level in nearly a month, weighed down by a stronger US dollar following the Federal Reserve’s hawkish hike. The Fed delivered its first interest-rate increase in more than three years, with projections showing another hike before year-end. As the dollar firms, greenback-priced commodities become more expensive for buyers using other currencies, weighing on demand. However, the downside remains limited by relatively tight supply fundamentals. Lower mine output and production disruptions have constrained concentrate availability. Sharply lower smelter treatment charges, which have fallen into negative territory, further underscore the shortage of feedstock available to refiners. LME inventories also remain low by historical standards, while physical zinc availability outside China remains particularly tight.
Zinc prices fell below $3,800 per tonne to their lowest level in nearly a month, weighed down by a stronger US dollar following the Federal Reserve’s hawkish hike. The Fed delivered its first interest-rate increase in more than three years, with projections showing another hike before year-end. As the dollar firms, greenback-priced commodities become more expensive for buyers using other currencies, weighing on demand. However, the downside remains limited by relatively tight supply fundamentals.
Lower mine output and production disruptions have constrained concentrate availability. Sharply lower smelter treatment charges, which have fallen into negative territory, further underscore the shortage of feedstock available to refiners. LME inventories also remain low by historical standards, while physical zinc availability outside China remains particularly tight.