Zinc futures traded just below $3,600 per tonne, holding close to a four-year high as easing geopolitical risks and tight near-term supply underpinned prices. The remotely signed memorandum of understanding between the US and Iran to end their conflict has reduced fears over global economic growth and brightened the outlook for industrial demand.
On the supply side, recent disruptions at major producers have intensified concerns. Glencore’s Kazzinc operation in Kazakhstan is running at reduced capacity following an explosion, while Nexa’s Cajamarquilla smelter in Peru was temporarily shut after fire damage, though output is now gradually resuming. In addition, Goldman Sachs highlighted that Boliden’s Garpenberg mine in Sweden may operate at structurally lower output levels for an extended period after seismic activity earlier this year.
At the same time, a stronger US dollar—buoyed by rising expectations of a Federal Reserve rate hike—has weighed on dollar-denominated commodities, tempering some of zinc’s gains.