[notes of SMM Zinc Internal Morning meeting]

News from SMM7 on January 1st,

Zinc Morning meeting: macro: after the US-China summit agreed to restart economic and trade talks, Trump said he would not impose new tariffs on Chinese goods "for the time being." the outcome of the summit between the two countries was better than expected, and basic metals generally turned red.

Fundamentals: last Friday spot review: Shanghai: the last trading day at the end of the month, the market circulation is still abundant, the morning market SMM net average price floating market transaction is still relatively active, rising sticker discount 50-discount 40 yuan / ton, but the market transaction is relatively weak, net average price floating 20 yuan / ton and discount 60 yuan / ton intention is higher, the differences between the two sides significant transaction volume is limited. In the second trading period, the market discount stabilized and the mood of receiving goods warmed slightly, but the transaction was still relatively flat at the end of the month, and the overall transaction remained stable yesterday. Guangdong: the refinery shipment is normal, the market supply circulation is abundant. Some of the holders quoted in the morning concentrated on the average price-20, other holders focused on the 08 contract rising water 160 180 yuan / ton, but the market transaction did not see a clear response; into the second trading period, the market quotation concentrated on the 08 contract rising water 140 160 yuan / ton, the market transaction is mainly low price transactions, to 08 contract rising water 140 yuan / ton transactions. Overall, the transaction situation in Guangdong today is basically the same as yesterday. Tianjin: normal shipment of refineries, the market supply of goods is more abundant. The early quotation of the holder is around 90 yuan / ton for 07 contract, but the downstream is mainly inquiry and wait-and-see, superimposed and downward, most of the holders do not have a strong willingness to adjust the price, slightly cherish the sale. Some of the subsequent holders took the lead in adjusting the price to 50 to 100 yuan / ton, the market transaction situation has improved, the overall contribution of low-cost brand goods to the main transaction, the overall transaction situation is weaker than yesterday. Inventory: as of June 28, the social inventory of zinc in the three places decreased by 3100 tons compared with June 21, and slightly decreased by 1500 tons to 152100 tons compared with June 24. The decline continued last week, but by a smaller margin. SMM learned that the arrival volume of refineries this week is more general, and import shipments are not much, downstream last week on a low replenishment, this week to take a significant decline in the willingness to take goods, but a little bit of this week to pick up the goods, increase some of the out of the warehouse, inventory recorded a slight decline. SMM believes that in July, consumption or continued decline, inventory decline is expected to be further reduced until there is a cumulative inventory. Bonded area inventories: zinc stocks in the Shanghai bonded area fell 2200 tons to 91100 tons as of June 28, according to the SMM survey, down 2200 tons to 91100 tons from Friday, five consecutive weeks of decline, but the decline narrowed this week. At present, the import loss is still at a high level, the foreign trade activity is low, and the circulation of domestic imported zinc remains low. This week, we still heard that some imported zinc left the bonded area through re-export. Zinc price: Shanghai zinc pressure moving average on Friday, with the recovery of macro sentiment, the superimposed low inventory state is still continuing, providing a better basis for the return of zinc in London, and zinc in Geneva may be running at the bottom of the 5, 20-day moving average; Shanghai zinc stopped yin and closed yang, went up to the 20-day moving average, and the current inventory growth rate was lower than expected, while the macro mood warmed up, giving Shanghai zinc a chance to rise, but considering the simultaneous appreciation of the RMB, the upward range may be limited. Forecast today: expected to run in the range of 2490-2540 US dollars / ton, Shanghai Zinc main 1908 contract or operation in the vicinity of 19850-20350 yuan / ton. Material 0 # domestic increase by 100