Zinc surged more than 2% on Tuesday September 1

SHANGHAI, Sep 2 (SMM) – The most-active SHFE 2010 zinc contract finished the day 2.35% higher at 20,450 yuan/mt on Tuesday September 1, after hitting an intraday high of 20,460 yuan/mt.

SMM suggested that the surge in zinc prices were mainly due to macro factors. Federal Reserve Vice Chairman Clarida said that he held open attitude to the implementation of yield curve control measures in the future, and policy makers may "adjust" the latest "economic forecast summary" released in September.

The manufacturing Purchasing Managers’ Index (PMI) came in at 51 for August, slightly down 0.1 percentage points from last month, indicating that the manufacturing industry was generally running smoothly. On the whole, the macro sentiment was optimistic. The US dollar index fell below 92, which hit the lowest since May 2018. That also accounted for the rise of zinc prices.

On the supply side, domestic smelters basically finished the maintenance, and resumed normal production. Meanwhile, according to SMM survey, the processing fee of domestic zinc concentrate was 5,550 yuan/mt (Zn content), as of August 28 which was higher by 550 yuan/ mt (Zn content) than the previous lowest level of 5,000 yuan/ mt (Zn content), and the profit of smelters further improved. The domestic supply month by month is expected to increase in the near term.

On the consumption side, the zinc inventories will be monitored amid the peak season. The downstream environmental protection in Tianjin will have an impact on consumption in the near term, and the impact of environmental protection will come under scrutiny in the following weeks.