[SMM analysis] there is still a possibility of widening the monthly difference between short-term supply and demand.-Shanghai Metals Market

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[SMM analysis] there is still a possibility of widening the monthly difference between short-term supply and demand.

Translation 05:42:17PM May 30, 2019 Source:Shanghai Nonferrous Metals Network

SMM, May 30 / PRNewswire-Asianet /-

The weekly zinc line turned red this cycle, and the main operating center of Shanghai zinc moved up to the 20-day moving average, showing a strong performance in the non-ferrous plate. Looking back at fundamentals, there are two main changes this week:

First, last week SHFE warehouse receipts fell by more than 15000 tons a week, according to SMM inventory data show that most of the warehouse receipts have been transferred out of the warehouse, but there are no obvious, there are doubts about whether it can be obvious, as of May 30, zinc warehouse receipts are 16037 tons.

Second, this week, Gansu Chengzhou smelter temporarily suspended production due to sulfur dioxide escape problems, the plant has an annual capacity of 100000 tons, belonging to the previous registered brand.

Although the domestic refined zinc supply is in an accelerated recovery period in May, it is still far from the peak of the year, and it will take time for production growth to shift to inventory growth. Against this background, the recent slight shift in the supply side has become the driving force behind the price rise. Although there is a large time vacuum difference in the middle.

Judging from the surface structure, the contract price difference of 1906-1907 has widened to about 400-420 yuan / ton this week from about 260-280 yuan / ton last week, while the contract price difference of 1906-1908 has widened from 450 yuan / ton to 770,800 yuan / ton. The near strong and far weak pattern is more significant.

However, there are great differences between the spot level and the futures performance. This week, the spot quotation in the Shanghai stock market accelerated from a rise of 110 yuan / ton to a discount of 20 yuan / ton, and the spot market showed overall easing. In addition to the small discount near the trader's single activity has increased, downstream this week little participation, spot performance as an oversupply of the absolute buyer's market.

From the point of view of traders and refineries, due to the limited transfer of hedge positions in the early period to the next month, and the narrowing of the base gap at the same time, traders have a strong demand for flat positions, which has also become the driving force for higher prices in the current month.

From the point of view of supply, there are fewer refineries to be overhauled in June, and Huludao, Mengzi, and West mines will contribute some increments in May, while the output of Zhuzhou smelter, Hanzhong, and Taifeng will further increase. If no accident, the domestic refined zinc production in June will be further close to the peak of the year, the supply growth is more certain; On the other hand, June-August belongs to the off-season of zinc consumption, and the pressure of supply growth is more obvious. It can be found that the relationship between supply and demand is worse in the long term, and the winning rate of betting on long-term short is relatively high. This is a major motivation for the acceleration of 1908 contract position increase in the near future.

In summary, before the end of June delivery, if there is no accident, the contract in recent months will still have a relatively strong reason, and the main Shanghai zinc month will be completed early to the beginning of the month, due to relatively large selling pressure, 1906-1908 contract monthly difference is still possible to further expand.

Key Words:  Zinc  price  processing fee 

[SMM analysis] there is still a possibility of widening the monthly difference between short-term supply and demand.

Translation 05:42:17PM May 30, 2019 Source:Shanghai Nonferrous Metals Network

SMM, May 30 / PRNewswire-Asianet /-

The weekly zinc line turned red this cycle, and the main operating center of Shanghai zinc moved up to the 20-day moving average, showing a strong performance in the non-ferrous plate. Looking back at fundamentals, there are two main changes this week:

First, last week SHFE warehouse receipts fell by more than 15000 tons a week, according to SMM inventory data show that most of the warehouse receipts have been transferred out of the warehouse, but there are no obvious, there are doubts about whether it can be obvious, as of May 30, zinc warehouse receipts are 16037 tons.

Second, this week, Gansu Chengzhou smelter temporarily suspended production due to sulfur dioxide escape problems, the plant has an annual capacity of 100000 tons, belonging to the previous registered brand.

Although the domestic refined zinc supply is in an accelerated recovery period in May, it is still far from the peak of the year, and it will take time for production growth to shift to inventory growth. Against this background, the recent slight shift in the supply side has become the driving force behind the price rise. Although there is a large time vacuum difference in the middle.

Judging from the surface structure, the contract price difference of 1906-1907 has widened to about 400-420 yuan / ton this week from about 260-280 yuan / ton last week, while the contract price difference of 1906-1908 has widened from 450 yuan / ton to 770,800 yuan / ton. The near strong and far weak pattern is more significant.

However, there are great differences between the spot level and the futures performance. This week, the spot quotation in the Shanghai stock market accelerated from a rise of 110 yuan / ton to a discount of 20 yuan / ton, and the spot market showed overall easing. In addition to the small discount near the trader's single activity has increased, downstream this week little participation, spot performance as an oversupply of the absolute buyer's market.

From the point of view of traders and refineries, due to the limited transfer of hedge positions in the early period to the next month, and the narrowing of the base gap at the same time, traders have a strong demand for flat positions, which has also become the driving force for higher prices in the current month.

From the point of view of supply, there are fewer refineries to be overhauled in June, and Huludao, Mengzi, and West mines will contribute some increments in May, while the output of Zhuzhou smelter, Hanzhong, and Taifeng will further increase. If no accident, the domestic refined zinc production in June will be further close to the peak of the year, the supply growth is more certain; On the other hand, June-August belongs to the off-season of zinc consumption, and the pressure of supply growth is more obvious. It can be found that the relationship between supply and demand is worse in the long term, and the winning rate of betting on long-term short is relatively high. This is a major motivation for the acceleration of 1908 contract position increase in the near future.

In summary, before the end of June delivery, if there is no accident, the contract in recent months will still have a relatively strong reason, and the main Shanghai zinc month will be completed early to the beginning of the month, due to relatively large selling pressure, 1906-1908 contract monthly difference is still possible to further expand.

Key Words:  Zinc  price  processing fee