LMetals have lead in the wing. After their spectacular surge in the spring, following the invasion of Ukraine by Russian troops on February 24, their prices are on a declining trajectory. Like zinc. In April, the gray, galvanized metal exceeded the price of 4,500 dollars (4,600 euros) per ton. Since then, he’s been picking up. On the London Metal Exchange in London, it is currently trading below $2,700 per tonne. That’s a fall of nearly 40% from this high. Compared to January, the decline is 25%.
Zinc takes a nosedive… After the paroxysm of fears aroused by the outbreak of the armed conflict between Russia and Ukraine, investors have once again turned their eyes on China. More than ever, the economic pulse of the second world power makes the markets throb. However, the former Middle Kingdom has shown signs of fragility. The real estate crisis seemed, for a time, to threaten the balance of the building.
But it is also the health file and the very restrictive zero Covid policy decreed by the Beijing government that has triggered concern. A policy defended by the president, Xi Jinping, during his reappointment for a third term at the head of the Chinese Communist Party, on October 23. The repeated confinements of neighborhoods, even entire cities, at the slightest detection of Covid-19 cases, are causing growth to sputter.
Sensitive subject
Latest examples, the decision taken, Wednesday, November 2, to put under glass for seven days the entire area surrounding one of the largest iPhone manufacturing plants in the world. Owned by the Taiwanese group Foxconn, an Apple subcontractor, it employs more than 200,000 people in Zhengzhou, in eastern China. But also the postponement, until further notice, announced Friday, November 4, of the Canton Motor Show, which was to be held from November 18 to 27.
Reason given: contamination “many and widespread” in several areas of this southeastern Chinese city. The dissemination on social networks, at the beginning of the week, of an unofficial document stipulating an upcoming relaxation of the zero Covid policy, perhaps in March 2023, has also caused metal prices to rebound, including that of zinc, a sign of the subject’s sensitivity. Fears of an economic recession in Western countries are also weighing. As well as the flight of the dollar, which makes the purchases of raw materials all the more expensive.
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