Zinc Futures Fall on Possible EU Tariffs

Zinc futures fell to around $2,890 on September 26 after reaching a near six-month high earlier in the month amid reports that the European Commission plans to impose steep tariffs—ranging from 25% to 50%—on Chinese steel imports and related products in the coming weeks.

The move aims to curb steel imports and protect Europe’s domestic producers, as global overcapacity has been straining profit margins and hindering investment in decarbonization efforts across the continent’s steel industry.

Since zinc is predominantly utilized to coat and protect steel from corrosion, any reduction in Chinese steel production resulting from these tariffs could substantially diminish zinc demand.

Should China produce less steel due to limited access to the European market, its demand for zinc is likely to decrease, exerting downward pressure on its prices.