[SMM topic] Zinc ore increment determines the trend of 2018 zinc price?

SMM1 2: zinc prices after the second half of 2016 after a unilateral rise in the market, the rally is still unfinished. In the second half of 2017, under the current situation of tight raw materials in refineries and low social inventory of zinc ingots, zinc prices fluctuated, brushing 10-year highs, an increase of more than 20%.

In the second half of the year, zinc low domestic refineries are willing to reduce production and stand up for price, maintenance is more concentrated, zinc ingot inventory began to step into the downward track. Superimposing that China's GDP grew 6.9 percent in the first half of the year compared with the same period last year, the national economy sent a stable and positive signal. driven by the recovery in global consumption and the reduction in domestic refined zinc production, long funds quickly returned to the commodity market, and zinc prices began to fight back from the Jedi. Open the road of unilateral rise, all the way up straight brush since 2007 to a new high of 26800 yuan / ton.

Then into the fourth quarter, with the advent of winter storage, accelerated the tension at the end of the mine, resulting in a series of downward adjustments in processing fees for domestic and imported mines, but the consumption performance downstream of zinc consumption was not good, and the rise in zinc prices was hindered. Around 25000 yuan / ton high pass showed a wide concussion situation, up and down amplitude of 25000 yuan / ton.

Prospect of Zinc Market in SMM:2018 year

As the supply gap narrows, the SMM Zinc team expects zinc prices to be high before and after low in 2018, with a high probability of a downward shift in the center of gravity. Considering that the strongest driver of the current round of zinc price increases comes from zinc mine tensions, which could reverse in 2018, as well as the risk that Glencore will expand its production, the increase at the zinc mine end is the main factor in determining the center of gravity of zinc prices in 2018, It's also the biggest risk point.

Zinc prices remained strong at the beginning of 2018, but with the expectation that supply and demand will gradually enter a balance in 2018, prices are expected to fall back slightly in the second half of the year, seeking support from the 20000 yuan / ton mark.

The SMM Zinc Research Group expects the LME March range of 2,450 to $3,500 and the SHFE zinc range of 20,500 to 29,700 yuan per ton in 2018.

Investment banks forecast zinc prices in 2018

Goldman Sachs: the international zinc market is expected to remain tight in the first half of 2018, raising its three-month / six-month / 12-month average price forecast to $3300, $3500 and $2800 a tonne. The zinc market is expected to return to oversupply after 2018, falling slowly to $3100 a tonne in 2018 and $2500 a tonne by 2022.

Citibank: zinc is expected to rise more than 10 per cent to $3600 a tonne in the second quarter of 2018 and 25 per cent to $4000 a tonne in the fourth quarter of 2018. In the long run, 2018 is the "last orgy" of the zinc price cycle.

Deutsche Bank: the supply gap is expected to persist until 2020, when zinc prices are forecast to rise by 8 per cent in 2018 and 11 per cent in 2019. Supply should rebound in 2018 and 2019, but the market will remain in short supply; the market will be driven by factors such as the resumption of Glencore's shut-down capacity in 2018.

Macquarie Bank: zinc is expected to rise to $3,350 or $3,400 over the next six months, and unless Glencore resumes, the Dugald River, Gamsberg and Castellanos mines will be mined one after another. It is expected to fall to $3050 a tonne in 2018 and to $2575 by 2019.

Bank of America Merrill Lynch: raised its 2018 zinc price forecast to $3125 a tonne.

Agencies forecast zinc prices in 2018

Soochow Futures: maintain the view of slow cattle zinc prices, 2018 LME zinc main price range forecast: 3050 ≤ 3800 US dollars / ton, Shanghai zinc main contract price range forecast: 24,000 ≤ 32,000 yuan / ton. Large new capacity at several major mines, such as Glencore, released limited production in 2018, as well as low inventory stimulus around the world, as the global economy improved and led to higher growth in zinc consumption terminals.

Jinrui Futures: for 2018, although the existing global inventory can cover the gap between supply and demand during the year, but in the case of conservative consumption estimates, only half of the inventory will still need to be digested during the year. As a result, the extreme market sentiment caused by low inventory is expected to continue to be seen during the year. Zinc price volatility is expected to further expand in 2018, the main core operating range of Shanghai Zinc is 20,000 yuan / ton, and the core operating range of Lunzin is expected to be 2400 ≤ 3500 US dollars / ton.

Huatai Futures: zinc prices remained strong at the beginning of 2018, but with the expectation that supply and demand will gradually enter a balance in 2018, the second half of the year or high slightly fell back. Zinc prices are expected to be high before and after low.

Shenyin Wanguo Futures: zinc ore supply tension will ease, demand will slow down, the difference between supply and demand from the gap to balance or slightly surplus. It is estimated that the LME zinc price range is 2400 ≤ 3,500 US dollars / ton, and the Shanghai zinc price range is 20,000 ≤ 25,000 yuan / ton.

CUHK Futures: LME zinc prices will fall back in the range of $3150 ≤ $3,300, while SHFE zinc will fall back between 24,650 and 26,250 yuan.

Galaxy Futures: it is expected that zinc prices for the whole year of 2018: LME zinc 3500 ≤ 2,300 US dollars, Shanghai zinc 27500 ≤ 18,500 yuan. As the overseas tension of zinc ingots will be more serious than that of China next year, the center of gravity of the ratio of Shanghai to London will shift down. at the same time, the domestic zinc in Shanghai will be weak in the far moon, and the discount structure will continue.

Please pay close attention to the "China Zinc Industry chain report 2008-2020". SMM will look forward to the fundamentals of the zinc market in 2018 from the following key in-depth analysis, to help you better grasp the trend of zinc prices in 2018:

What is the ratio of regeneration to primary substitution in the change of raw material procurement structure in smelter?

Zinc concentrate processing fees continue to decline, what are the reasons?

Where are the zinc ingots going in 2017?

Zinc ingot inventory continues, is there still room for decline in the future?

SMM exclusive: under the background of high price, the mine is very profitable, what is the cost structure of the mine?

SMM exclusive: smelter delivery structure

SMM exclusive: zinc consumption Distribution in all regions of China in 2017