Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Zinc smelters in China’s Yunnan province  were forced to slash production due to power curbs, which dented demand for zinc concentrate. This, in turn, pushed zinc Spot Treatment charges (TC) higher, Yash Sawant, Research Associate, Angel Broking Ltd told Davis Index on Monday.


The TCs for zinc in China hovered around $70/mt which climbed to $95/mt last week, increasing over 35pc followed by low concentrate demand by Chinese smelters.


Yunnan, which also accounts for about one tenth of China’s aluminium output, has directed the local metal producers to curb their electricity consumption to comply with China’s energy consumption targets for 2021. This might hamper their operational activities and raise severe supply threats. It could also support prices in the coming months.


Industrial metals continued to trade lower across borders in first half of Monday’s session as China’s move to cap the rising commodity prices remains a point of concern. Chinese regulators have vowed to keep a check on their commodity market, increase scrutiny for both futures and spot markets and restrict irregularities and malicious speculation.


Tapan Patel, Senior Analyst (Commodities), HDFC Securities, shared a recap of last week with base metals prices down. Nickel prices fell the most, losing more than 4pc, followed by copper and aluminium. Base metals declined on fear of Chinese policy action to curb high inflation.


China said that it would strengthen its management of commodity supply and demand to curb “unreasonable” increases in prices and prevent them being passed on to consumers. The ease in the US stimulus, and warnings from China triggered sell-off in copper and other metals form recent highs, said Patel.

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