According to the monitoring of the commodity market analysis system of Shengyi Society, as of June 27th, the price of 0 # zinc was 22568 yuan/ton, a slight increase of 2.95% compared to the zinc price of 21992 yuan/ton on June 23rd.
This week’s market analysis
Last week, zinc prices continued to decline, and in this context, downstream companies have increased their willingness to purchase at low prices and replenish inventory. As a result, zinc prices experienced a slight rebound in the second half of the week. However, the order situation in the terminal market has not shown significant improvement, and under the sustained effect of the off-season, companies generally hold a pessimistic attitude towards the future trend of zinc prices. Therefore, after a brief rebound, the zinc price adjusted downwards again.
Raw material end
The mines in northern China will basically complete the resumption of production work. At the same time, the domestic production of zinc concentrate will continue to maintain a release trend. Although the window for importing zinc concentrate in June will be closed, goods with previously locked prices will continue to flow into the market. Overall, the supply of domestic zinc concentrate is expected to remain relatively loose in June, and there is still a trend of further increase in processing fees.
Supply and demand side
On the supply side, overseas listed zinc projects have successfully released production as planned, resulting in a year-on-year increase in global zinc concentrate production from January to April. At the same time, the import volume of domestic zinc concentrate also showed a year-on-year increase trend, and the inventory days of raw materials in domestic zinc smelters increased month on month, reaching a relatively high level in the same period of history. In addition, the concentrate processing fee (TC) remains stable and has slightly increased, further enhancing the profit margin of zinc smelters and strengthening their smelting enthusiasm. It is expected that the supply of refined zinc will increase.
On the demand side, the operating rates of downstream galvanizing, die-casting, and zinc oxide industries have declined month on month. At present, the domestic real estate market is still in a downward cycle, the rush to install in the photovoltaic industry has come to an end, the production schedule of the home appliance industry is showing a downward trend, and the automotive industry is facing the problem of increasing inventory pressure. There are signs of overall weak demand in reality.
Inventory end
This week, LME zinc inventory showed a month on month decline, while the spot discount rate has narrowed. Domestic zinc spot inventory also showed a month on month decline, while spot premiums showed a downward trend. The global zinc inventory continues the process of destocking.
comprehensive analysis
Recently, the zinc concentrate processing fee (TC) has remained stable and shown an upward trend. Although there has been a significant increase in the domestic zinc production plan for June, based on the actual weekly production data, it may be difficult to achieve the expected level. At the same time, the expectation of the Federal Reserve cutting interest rates is gradually heating up. In addition, the strike at a zinc smelter in Peru has raised concerns in the market about a decrease in zinc supply, which has led to a strong upward trend in zinc prices.
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