Research firm Fitch Solutions Macro Research has revised its 2019 zinc price forecast downwards to an average of $2 500/t, compared with the previously forecast of $2 600/t.
This revision comes on the back of a steady decline in investor sentiment feeding into weakened demand for zinc owing to the ongoing US–China trade war, bringing prices lower over the third quarter.
Over the next quarter, Fitch expects prices to stabilise around spot levels.
While targeted stimulus from the Chinese government will feed into increased demand for steel, and thus zinc, this will be offset by strong refined zinc supply growth in China, Fitch indicates.
Moreover, it expects that its now slightly bullish view of the dollar will cap the price appreciation stemming from subdued global refined zinc supply outside China.
Over the coming years, Fitch expects zinc prices to remain on a slow downtrend as the market deficit narrows owing to waning consumption on the back of weakening steel production growth in China.
It forecasts prices to reach an average of $2 350/t by 2023.