SMM March 7 News:
Prices: Macro side, the domestic Two Sessions policy expectations have concluded, entering the stage of practical verification. Overseas, with the decline in US stocks, non-ferrous metal prices generally moved upward. Fundamentals side, frequent overseas news emerged during the week. Following a significant increase in LME cancelled warrants to the highest level of the year, with the cancellation ratio surging to around 44%, there has been a pullback recently, but it remains near 41%. Subsequently, Trafigura's Nyrstar announced a 25% production cut at its Hobart zinc smelter in Australia, which has an annual capacity of approximately 250,000 mt, starting in April due to losses, leading to a reduction in overseas supply and a noticeable boost in zinc prices. Domestically, with the replenishment of imported ore, domestic zinc concentrate TCs continued to rise above 3,200 yuan/mt (metal content). Meanwhile, with the increase in sulphuric acid prices, some smelters that had previously planned maintenance may delay their schedules, gradually realizing supply-side increments. On the consumption side, as environmental protection-driven production restrictions in northern regions ended, production gradually resumed. It is understood that orders for steel towers, traffic barriers, and profiles in galvanizing are relatively strong, while PV orders are weaker. Additionally, processing fees in northern regions are relatively low, and orders are weaker compared to the east China market, awaiting stronger consumption recovery. In the short term, the Asia Benchmark negotiations are nearing completion, and processing fees are likely to fall short of expectations. At the same time, as the production increments from domestic smelters have not yet translated into inventory growth, zinc prices are unlikely to decline significantly. Coupled with overall positive macro sentiment, zinc prices are expected to fluctuate at highs.
(The above information is based on market communication and comprehensive evaluation by the SMM research team. The information provided herein is for reference only and does not constitute direct investment research advice. Clients should make prudent decisions and not replace independent judgment with this information. Any decisions made by clients are unrelated to SMM.)
