SMM July 31:
In July, the Tianjin zinc ingot market continued its overall pattern of ample supply and weak demand. Regional spot circulation resources were relatively abundant, while downstream purchasing willingness was insufficient, market transactions performed mediocrely, spot premiums remained in discount, and the supply-demand imbalance remained prominent.
On the supply side, overall production at smelters in north China remained stable at the end of July. Although some enterprises conducted routine maintenance, the reduction was limited and had little impact on zinc ingot supply in the Tianjin area. Meanwhile, previously accumulated inventory still needed to be digested, circulating supply was relatively ample, and traders showed strong willingness to sell. To facilitate transactions, they generally maintained discount quotes, and overall supply pressure persisted in the spot market.
On the demand side, downstream consumption showed no significant improvement at the end of July. Overall orders at galvanising enterprises in the Tianjin area were generally mediocre. Affected by weak end-use demand and limited profit margins, enterprises mainly made just-in-time restocking purchases, with insufficient willingness to stockpile proactively. Entering August, the traditional consumption off-season will continue. High temperatures and the slow pace of end-user construction are expected to make it difficult for downstream operating rates to significantly increase. Overall zinc consumption will remain low, and inventory destocking will be relatively slow.
Overall, the oversupply pattern of the Tianjin zinc ingot market in August is expected to be difficult to change. The supply side will remain loose, the demand side will lack significant improvement, and market transactions will still be dominated by just-in-time procurement. Spot premiums in the Tianjin area are expected to remain in discount, with little chance of significant recovery in the short term. Subsequent attention should be paid to the recovery of downstream consumption and the opening of the export window.
(The above information is based on market collection and comprehensive assessment by the SMM research team. The information provided herein is for reference only. This article does not constitute direct investment research or decision-making advice. Clients should make decisions prudently and not use this as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.)
