Japan: Electrolytic zinc prices drop to 19-month low

Mitsui Kinzoku announced on 23 May, 2023 that it will reduce prices of electrolytic zinc by JPY 9,000/t to JPY 397,000/t. Prices have fallen below the JPY 400,000/t-mark for the first time in 19 months since October 2021. The average price in May was JPY 401,800/t. This reflects fluctuations in international prices and exchange rates, according to a Japan Metal Daily report.

Since electrolytic zinc prices had exceeded JPY 400,000/t for the first time in three years since October'21, it stayed at a high level of around JPY 400,000-500,000/t. In April last year, the international market soared due to a growing tightness in supply and demand and production cuts at smelters due to soaring electricity prices led to prices reaching JPY 600,000/t for the first time in history.

The official spot price of zinc on the London Metal Exchange (LME) has been in the $2,400/t level since 18 May, falling to a two-year and seven-month low. Concerns about the economic outlook arising from weak Chinese economic indicators and the US debt ceiling problem impacted the market. In addition, the appreciation of the dollar against other major currencies weighed on prices.

On the other hand, the JPY's depreciation and USD's appreciation continued amid concerns about the widening of the interest rate differential between Japan and the US, supporting the quotes. On 23 May, the currency was at the lowest level in about half a year, with $1 = JPY 139 (TTS).

Note: This article has been published in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.