Zinc prices are likely to edge higher in the next three to six months, as the negative shock to global demand from the Covid-19 outbreak lessens, says financial risk management, solutions and insights company Fitch Solutions Country Risk and Industry Research.
Support for prices, it notes, will come from a gradual recovery in demand for zinc from the steel sector as mills ramp up production.
The company notes that the latest data from the World Steel Association suggests that the worst of the contraction in global steel production has passed, with output having contracted by 8.7% year-on-year in May.
Crucially, steel production in China looks to be gathering steam, with a 4.2% year-on-year increase recorded in May.