[notes of SMM Zinc Internal Morning meeting]

On the 12th of SMM6,

Zinc morning meeting: macro: the central bank launched 10 billion yuan reverse repo operation yesterday, due to the maturity of 60 billion yuan reverse repo yesterday, achieving a net withdrawal of 50 billion yuan; yesterday, after the notice of special bond issuance and project financing work, side boost market confidence in the follow-up infrastructure development. China's inflation figures for May are due today, with CPI rising to 2.7 per cent from 2.5 per cent in April, reflecting higher pork and vegetable prices, while PPI is expected to fall slightly to 0.6 per cent from 0.9 per cent in April, dragged down by lower commodity prices.

Fundamentals: yesterday's spot review: Shanghai: zinc futures are higher, the monthly difference is expanded, the spot discount is further expanded, from the discount 70-discount 60 yuan / ton or so to the discount 100-discount 80 yuan / ton or so temporarily stable, delivery has a certain profit space, some holders leave the market to wait and see, but also some holders actively take delivery of the source of delivery planning delivery, trade between merchants play a dominant role. The second trading period imports SMC and Shuangyan, Chihong, torch and other routine do not participate in delivery brand trading is relatively active, but under the limited conditions of downstream consumption participation, the transaction is slightly weak, the overall transaction gap is not large compared with yesterday. Guangdong: refinery normal shipment, market trading is still dominated by deliverable sources, some non-deliverable sources continue to explore, reported in the Shanghai zinc 1907 contract rising water 460 yuan / ton, delivery sources to rising water 480 yuan / ton transactions, downstream rigid demand replenishment, still little participation, as a whole, today, as a result of the current discount continued to expand, stimulate some traders to buy cash delivery positions, as a result of the current month discount continued to expand, stimulating some traders to buy cash delivery positions, Guangdong: refinery normal shipment, market trading is still dominated by traders, some non-deliverable sources continue to explore, reported in Shanghai zinc 1907 contract rising water 460 yuan / ton, downstream rigid demand replenishment warehouse, as a whole, today, due to the current discount continues to expand, stimulate some traders to buy cash delivery positions, The overall volume of trading was higher than that of yesterday, and the transaction was also better than that of yesterday. Tianjin: mainly, Zijin and other high-priced brand prices are quoted near Pingshui of the 06 contract, and low-price brands such as Hongye, Chihong and lark are quoted near the 06 contract discount of 100 yuan / ton, but the downstream is mainly wait-and-see and rarely receive the goods. Follow-up holders downgraded the rising water, for Zijin brand supply report in the 06 contract discount of 30 yuan / ton, for Chihong and other low-price brand supply down to 06 contract discount of 150 yuan / ton, however, after the price adjustment, the market transaction is still not significantly heated, only a small number of low-price brand goods contribute to a certain trading volume. Today, the trading atmosphere in Tianjin market continues to be light, and the overall transaction situation is worse than that of yesterday. Zinc price: every other day, zinc stop negative and positive, break through the 10-day moving average, 20 days moving average direction, LME inventory recorded no increase, the market for the subsequent write-off warehouse receipt brought about inventory decline is still expected, superimposed macro emotional recovery, Geneva zinc or in the integer position along the arrangement; overnight Shanghai zinc high open low, strong back structure corresponding to long-term supply increase, long-term weak pattern is still obvious, Shanghai zinc main upward pressure. Forecast today: expected to run in the range of 2500-2550 US dollars / ton, Shanghai Zinc main 1908 contract or run in the vicinity of 20300-20800 yuan / ton. Material 0 # domestic fell 35%.