Zinc Futures Hit Near 6-Month High

Zinc futures climbed above $2,960 per tonne in mid-September, hitting a near six-month high, continuing to find support from a weakening US dollar and tightening supply conditions in China. The greenback softened after the Fed signaled a likely rate cut at its upcoming meeting later this week, with markets pricing in a 96% chance of a 25 bps cut and a slim 4% chance of a 50-point move. This dovish shift boosted global liquidity expectations and weakened the dollar, lifting demand for dollar-priced commodities. In addition, China is expected to reduce output following Beijing’s renewed efforts to curb overcapacity in key industrial sectors—a move aimed at combating persistent deflationary pressures. Meanwhile, recent economic data out of China highlighted ongoing weakness. Industrial production in August fell to a one-year low, missing market expectations, while retail sales slowed to an eight-month low and also came in below forecasts.