SHANGHAI, Oct. 9 (SMM)－The production limit policies in winter are being implemented, which influences supply-demand relationship in various industries and price trend of futures market. As the 19th National Congress of CPC is coming, how will the policy impact metals market after the holiday?
Liu Xiaolei, SMM senior aluminum analyst, believes currently the prices have given enough reflection on anticipation of production limit due to environmental protection. Aluminium ingot is still in a high stock so production limit will not cause short supply of Aluminium ingot for the time being. In addition, the market should be alerted to supplement supply of recovery production after limit production. Restarted as well as newly-increased capacity may impose relatively great pressure on Aluminium price. In the short term, the price will keep volatile in wide range with consecutive introduction of environmental production policies.
Zinc price refreshed ten-year’s new high during the holiday. With the upcoming production limit as well as the opening of the 19th National Congress of CPC, the zinc price remains a dispute for the future. Liu Mengyue, SMM zinc analyst thinks the fundamentals of zinc remain the same for the short term and low inventories in three places support the price continuously. Zinc price is expected to run at high points after the holiday with obvious supporting moving averages below. But still need to be alert to the influence of environmental protection on downstream consumption in North China.
The environmental protection policies will restrict logistics within Beijing-Tianjin-Hebei Region, Wanglan, SMM senior lead analyst says, Henan smelting plants will limit their production at various extent and Jinli will overhaul its production line in October, which is anticipated to reduce 2/3 output, thus making lead supply in continuous tense. In the short term, lead price is still strong. Primary lead smelting plants supplied in normal for long-term orders during the holiday. With part of stock remains to be delivered to warehouse, inventories for small orders are not much larger than those before the holiday.
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