[summary of SMM Morning meeting] risk aversion in the market heats up last Friday when Zinc in Shanghai was in a weak position.

Minutes of the morning meeting of zinc in SMM on July 20th

Spot fundamentals

Shanghai: the smelter shipped normally, the domestic goods in circulation in the market were relatively tight, the trading contribution between traders was mainly closed, and the market was more willing to make domestication. The market quotation in the morning market was further raised to 100 yuan / ton of rising water than the day before yesterday, and the transaction performance was OK. Some of them intend to further raise to about 105 yuan / ton of rising water, but the market acceptance is not high, and the overall transaction is slightly better than the day before yesterday. (lidocaine)

Ningbo: the willingness to push up prices in Shanghai was strong last Friday, and the spot water rose higher in the morning. Ningbo market tried to follow, but it was difficult to maintain high rising water. In the first trading session, Tiefeng reported around 100 yuan / ton for the August contract, West Mining reported around 70 yuan / ton for the August contract, and Kirin reported around 100 yuan / ton for the August contract. Huize has not yet arrived. Entering the second period of time, there is still no obvious pick-up in downstream buying, traders are unwilling to ship goods at low prices, and the rising water in the market has not changed obviously. on Friday, the actual transaction downstream is relatively light. (bullish)

Guangdong: during the first trading session, the arrival of goods in the Guangdong market increased this week, and the market shipping pressure was relatively great. The holder initially tried to raise the price, but after the individual holder took the lead in adjusting the price, the market price was under pressure, and the downstream entered the market to replenish the goods on Friday, but the total amount was limited. Kirin, Mengzi and Huize quoted water for the Shanghai zinc contract in September to rise 20 won 40 yuan / ton. The second trading session, prices are weak, there are still some purchases downstream, traders mainly lower prices to receive goods, the market quotation has not changed much, on the whole, the market trading on Friday was better than the day before yesterday. Kirin, Mengzi and Huize quoted a price of 20,30 yuan / ton for the September contract of zinc in Shanghai. (lidocaine)

Tianjin: last Friday, the weak consolidation of zinc in Shanghai, the spot market maintained a rising discount price, and the price was relatively uniform. The ordinary brand Bering News quoted a rise of 110 yuan per ton for the 08 contract, and Hongyi quoted a rise of 130 yuan per ton for the 08 contract. Chi Hong quoted a rise of 100 yuan per ton for the 08 contract, and the high-priced brand Zijin offered a rise of 150 yuan per ton for the August contract, while Baiyin quoted a rise of 180 yuan per ton for the 08 contract. The fourth Ring Road (delivered) quoted 100 yuan / ton of water for the 08 contract, and Ha Zn (including the depot) quoted 60 yuan / ton for the 08 contract. Zinc prices skyrocketed and fell back last Friday, traders maintained prices for rising and sticking water, and some traders raised prices for shipments in the morning, but the shipments were not smooth, so they lowered their discounted shipments. Downstream, the absolute price fell slightly last Friday, and the willingness of downstream enterprises to receive goods did not improve significantly, maintaining the need for weak procurement. On the whole, the turnover on Friday was slightly better than that of the day before yesterday. (lidocaine)

Inventory: according to SMM, as of July 17, the total inventory of SMM seven zinc ingots was 206700 tons, down 5700 tons from July 10 and 7500 tons from July 13. Inventory fell last week, mainly in Shanghai and Tianjin, increased in Guangdong and slightly decreased in Jiangsu and Zhejiang. The lower reaches of the Shanghai area is just in need of procurement, and the output of the warehouse has declined to a certain extent, but due to the recent floods in many places across the country, affecting the arrival of the market and little inflow of imported zinc, inventories have recorded a large drop; in Guangdong, due to the narrowing of the price gap between Shanghai and Guangdong in the previous week, coupled with the decline in the proportion of direct delivery terminals, the market arrival has increased significantly; Tianjin received more goods last week, mainly digested inventory last week. Overall, the original inventory in Shanghai, Guangdong and Tianjin fell by 4200 tons, while the inventory in seven places across the country dropped by 5700 tons. (lidocaine)

Bonded area inventory: according to SMM, as of July 17, the inventory of zinc ingots in Shanghai bonded area was 46000 tons, 1000 tons less than last week. It is understood that at the beginning of the week, the import loss narrowed, and a small number of zinc ingots entered the domestic market from the bonded area, while during the week, as the import loss expanded again, there was little inflow of imported zinc. Last week, the inventory of zinc ingots in the bonded area as a whole recorded a slight decrease of 1000 tons. (lidocaine)

Today's forecast zinc price: last Friday, Lun Zinc received the mid-pubic column, the daily K center of gravity moved down, the lower 10-day line to provide support, the upper Bollinger Road upper rail to form a compression, KDJ index opening down expansion. On Friday, LME inventories fell by 125t, or 0.1%, to 122400 tonnes. The overseas epidemic reached a new high, adding to the uncertainty about the economic recovery, adding to the difficulties of EU leaders in reaching a consensus on a large-scale economic stimulus policy and a weaker-than-expected index of US consumer confidence. Lunzhe continued the downward trend. Pay close attention to the development of Sino-US trade relations in the short term. Last Friday, Shanghai zinc recorded a bald negative column, falling below the 10-day line support, 5-day moving average above the formation of suppression, MACD index positive column narrowed. In terms of fundamentals, processing fees have stopped falling and rebounded, boosting the production enthusiasm of smelters, mainly increasing production and loosening the supply end, while under the background of weakening the marginal consumption, zinc prices are high and profits of downstream enterprises are narrowing, which also affects production enthusiasm and lack of fundamental support. superimposed Sino-US trade frictions constantly, market risk aversion mood heats up, Shanghai zinc weak operation.

Today's forecast: the price of lun zinc is expected to operate in the range of US $2170 / ton. The contract price of Shanghai Zinc 2008 is expected to operate in the range of 17400muri 17900 yuan / ton. Domestic zinc dropped 150 yuan per ton.