The CEO of a leading Chinese zinc supplier believes the devaluation of the yuan will help manufacturers on the mainland, but possibly not before year’s end.
Clara Chan of Lee Kee Group told Reuters: “The depreciation of the yuan will help customers when they get import orders. Obviously it just happened last week so it will take a few months to see the effect.”
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Lee Kee supplies zinc and other base metals to automobile manufacturers and other end-users throughout Southeast Asia. It is one of just a few Asian members of the London Metal Exchange.
“The US market is recovering, but at a slower pace than before,” Chan added. “Europe is a bit slow at the minute and so is the Chinese economy. We have started to see some activities coming back after summer, but it’s still too early to tell. So the outlook for the metal prices, we think that it will stay challenging in the short term.”
Zinc Prices: Brace for volatility
We reported last week that the zinc market continues to confuse, and we expect that to continue as the metal has been in a consistent downturn for the past year. In China, manufacturing sentiment and refined zinc import levels are the main drivers for the metal, but stocks in New Orleans, a region far from any other representing demand, are trending lower and LME stocks likewise, suggesting a tightened supply for what would constitute a “normal” market.
You can find a more in-depth zinc price forecast in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds: