Zinc Market Shifts to Surplus as Demand Slumps and Production Rises
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Zinc market has shifted from supply deficit to surplus this year due to weaker demand and higher production, especially in China.
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European zinc demand contracting due to construction slowdown, while refined output also falling due to high energy costs.
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In August, large amounts of zinc stocks arrived on LME warrant, but were quickly snapped up and cancelled, likely for off-market financing deals.
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Zinc now moving into hidden off-market storage deals, with fluctuating LME spreads making financing profitable for traders.
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Underlying zinc market is oversupplied, despite what LME stocks levels suggest, as in the past when similar financing deals occurred.