Global zinc short-term outlook February 2021

January's almost $300 retreat in the zinc price proved short lived, and the zinc price along with the rest of the base metal complex on the LME rallied in February. The rally saw the zinc price test resistance at $2900 and the cash to three months spread narrow. A key driver behind investors’ enthusiasm for commodities has been the robust recovery of manufacturing activity and expectations of economic growth gaining momentum. Worries over the inflationary impact of government stimulus may also be encouraging some investors to look to commodities as a means of hedging against inflation. The first-round offers and bids in negotiations for annual contract treatment charges were very low from the mines and high from smelters. Setting initial bids and offers very far apart is traditional in this industry.