Metals News
Analysis: Tianjin zinc spot discount goes deeper on weak demand
data analysis
Dec 28,2017

SHANGHAI, Dec 28 (SMM)- The spot discount of 0# zinc of general brand in Tianjin has traded from 200-160 yuan/mt this morning to 250-220 yuan/mt in the afternoon on Thursday December 28. This was also some 160-180 yuan/mt lower than those seen in the Shanghai market.  

SMM believed stricter environmental protection policies towards the year-end and natural gas rationing contributed to such widening discount.

The Tianjin government has ordered all operation work at constructions sites to stop and industrial plants to limit production from December 28 to 30 in response to air pollution during the period. SMM learned that local galvanizing and zinc oxide plants would limit output by over 30%.

In addition, rising natural gas prices and the rationing policy has seen gas supply limited. This has impacted operations at downstream zinc consuming companies, leading to weaker demand for refined zinc.

Smelters, on the other hand, have been keen in selling down their inventory towards the year-end. SMM expects spot zinc discount in Tianjin to remain weak after the New Year holiday. 


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