SMM News: on Tuesday, the market rebounded in optimistic expectations of Sino-US economic and trade negotiations. As of 14:55, Shanghai zinc main contract ZN1909 was 19665 yuan / ton, up 1.5%, and Shanghai nickel main contract NI1910 was 112330 yuan / ton, up 1.84%.
In terms of zinc, at present, the start of zinc smelting is close to full production, but the progress of zinc ingot release is still not as expected, and the summer routine maintenance of some refineries in the northern part of the summer has begun one after another. Combined with the recent second round of large-scale environmental inspectors, the incremental release of zinc ingots may not be as expected. On the other hand, July and August are the traditional off-season, but refined zinc stocks did not rise but fell. By the end of July, LME inventories fell by 25000 tons a month, and domestic social inventories fell by nearly 16000 tons, strengthening the expectation that gold, nine and silver will go out of stock again. At the same time, under the optimistic prospect of rising expectations of the Fed's interest rate cut and the opening of a new round of Sino-US trade negotiations, the improvement in the emotional plane is expected to lead to a rebound in metals that were suppressed in the previous period. The core of the future market is the time when the smelting inflection point is transmitted to the inventory inflection point, and pays attention to the opportunity of zinc market pullback caused by the expectation difference. In terms of nickel, according to the stainless Steel Branch of the China Special Steel Enterprises Association, the national output of stainless steel crude steel in the first half of 2019 was 14.354 million tons, an increase of 1.126 million tons, or 8.51 per cent, compared with the same period in the first half of 2018. Among them, the output of nickel stainless steel was 7.065 million tons, an increase of 1.128 million tons, an increase of 19 percent. A sharp rise in stainless steel production boosted bulls' confidence. In the future, the growth rate may slow down in the second half of the year. When the stainless steel production capacity in Indonesia is released in the second half of the year, the export situation is not optimistic. If the export situation does not improve, it will lead to limited stainless steel production growth and increased stainless steel inventory pressure. At that time, it may usher in the inflection point of domestic production, in addition, stainless steel does not have a strong price basis from the large easing of raw materials, and the nickel market is still likely to fall back in the near future.
Operation suggestion: zinc short entry, nickel rebound short.