[notes of SMM Zinc Internal Morning meeting]

News from SMM7, March 23:

Zinc Morning meeting: macro: Sino-US trade negotiations seem to have taken a turn for the better. It is reported that China is considering plans to increase US soybean purchases, or include waiving retaliatory tariffs on US soybeans. Trump discussed Huawei with CEO, a technology company such as Qualcomm. Trump announced that members of Congress have reached a cross-party agreement to suspend the debt ceiling. Britain's new prime minister will be announced on Tuesday, and Boris Johnson is expected to win. There has been a sudden change in the direction of China's housing financing policy, with investors warning that the strength of property bonds is unsustainable.

Fundamentals: yesterday's spot review:

Shanghai: the focus of zinc futures operation has shifted downwards, while refineries in Shanghai stock market have received replenishment at the same time, but due to the concentrated expiration of the second batch of long orders in the month, the demand for trading and replenishment by market traders has declined somewhat. In the morning market, the price quoted by Shengtianshui is only slightly raised to about 70 yuan / ton, and the high price quotation is more concentrated, the direct transaction is relatively less, and the long order transaction with the average price is still relatively concentrated. In the second trading period, with the further decline of zinc in the second trading period, the enthusiasm of some traders to make up orders increased, and the market quotations changed little and all had transactions, while Shuangyan, Dongling, Chihong, and other downstream brands, the quotations did not change significantly. Compared with the domestic quotations of about 10 yuan / ton, the narrowing of the brand premium indicates that the downstream purchasing enthusiasm continues to be weak, and the enthusiasm of zinc in the lower reaches of the day has not been significantly improved. Maintain on-demand procurement, the overall transaction is not much different from last Friday.

Guangdong: refineries actively ship goods, the market supply of goods is abundant. In the morning, the holder concentrated on the average price of-10 yuan / ton, but the market did not see more transactions. Entering the second trading period, the holder newspaper in the 09 contract discount 70 yuan / ton to 40 yuan / ton, coinciding with 08, 09 contract monthly difference expanded to 40 to 50 yuan / ton, Guangdong market spot discount to the current month contract continued to expand, market transactions improved, holders raised the discount of about 10 yuan / ton. Overall, Guangdong market shipments today, superimposed downward, market transactions have improved, traders contributed to the main trading, market transactions have improved compared with last Friday.

Tianjin: disk down, refineries slightly cherish the sale, the market circulation of goods is abundant, so the impact is not great. In the morning, the quotation of the holder focused on the 80 to 100 yuan / ton of the 08 contract, in which the market had more demand for the high price brand of 80 yuan / ton of the 08 contract, and the holder saw the situation to increase the water to about 100 to 110 yuan / ton of the 08 contract, and the transaction situation of the low price brand whose price was about 90 yuan / ton of the 08 contract was relatively poor, and the holder saw the trend reduced to about 60 to 80 yuan / ton of the 08 contract. Disk down, downstream every fall there is a rigid demand to buy, but due to rising water to maintain a higher level, superimposed downstream bearish sentiment is stronger, the overall transaction situation is only slightly better than last Friday.

Zinc price: overnight zinc recorded a small positive line, on the shadow line on the 5-day EMA suppression, under the recovery of overseas supply, the contango structure gradually expanded, the basic support is weak, the back-up kinetic energy of zinc is still to be considered. Overnight Shanghai zinc stop and repair, the overall operation in the vicinity of the 5-day moving average, KDJ indicators turn downward, indicating that Shanghai zinc back up kinetic energy or more limited, domestic three places under the increase in social inventory, Shanghai zinc fundamentals support is relatively weak, short position reduction upward, Shanghai zinc action can be more limited. Material 0 # domestic double swallow zinc pair increased by 50% to 90% in August.

Forecast today: expected to run in the range of 2390-2440 US dollars / ton, Shanghai Zinc main 1909 contract or run in the vicinity of 19000-19500 yuan / ton. Material 0 # domestic increase 30