In terms of macroeconomy, overseas economic data was upbeat, which led to weaker market expectations for the Fed's interest rate cut. Both the US stock market and the US index fell, while nonferrous metals prices rose. At the same time, driven by the domestic old-for-new policy, zinc prices rose significantly. On the fundamentals, the tight supply of ore remains, and zinc concentrate TCs are low. As more smelters will undertake maintenance in April, output is expected to remain low.
In terms of consumption, downstream companies restocked before the Qingming Festival. At the same time, ferrous metals prices stopped falling. As such, galvanising orders improved slightly. SMM data showed that social zinc inventory fell by 8,300 mt to 199,500 mt. On the other hand, due to the Qingming Festival, many companies shut down, and the overall operating rates of galvanising plants and die-cast zinc alloy companies were still on the decline. Overall, market sentiment has improved, but considering that there has been no significant improvement in consumption, zinc prices will lack impetus to breach 21,500 yuan/mt in the short term.
The SHFE 2405 zinc contract prices are expected to move between 20,700-21,700 yuan/mt this week.
LME zinc is expected to trade between $2,400-2,570/mt.
Spot discounts in Shanghai against the SHFE 2404 zinc contract are expected to move between 80-0 yuan/mt.
