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[2019.10.21 minutes of Zinc Internal Morning meeting] Brexit is hampered by expectations of interest rate cuts or a boost in zinc prices
Oct 21,2019 09:32CST
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The content below was translated by Tencent automatically for reference.

SMM Zinc Morning meeting on Oct. 21: Brexit is hampered by expectations of interest rate cuts or boost Zinc prices

 

Zinc Morning meeting: macroscopic: British Prime Minister Johnson's Brexit process was thwarted and the House of Commons decided to postpone the vote on the Brexit agreement, forcing Johnson to formally ask the European Union to postpone the Brexit date until January 31 next year. Johnson said the further extension was wrong and on Monday would again ask the House of Commons to vote for his Brexit deal. With the silence ahead of the Fed's policy meeting in late October, Vice Chairman Clarida left room for the possibility of a third consecutive rate cut, saying the risks remained "significant". The market was then expected to cut interest rates in October with little suspense; Mr Yi said the current renminbi exchange rate was at an "appropriate" level. Monday ushered in the people's Bank of China LPR monthly adjustment window, this week TMLF operation or reappearance.

 

Fundamentals: spot Review last Friday: traders are willing to strengthen their prices and market transactions are not as expected

 

Shanghai: the first trading period, the morning cardholder quite high water quotation, with the market offer to 1911 contract rose 130 yuan / ton, but the market transaction is light, the holder lowered the rising water quotation to 120 yuan / ton, but the transaction is still light, the market mainstream to the SMM net average price discount 5 yuan / ton transaction; In the second trading period, the zinc price continued to fluctuate, the holder maintained the rising water quotation in the 1911 contract rose 110-120 yuan / ton, each brand still maintains the priceless difference; the trade market is active, the downstream enterprise meets the low replenishment storehouse, but still maintains in the rigid demand inventory, the market overall transaction is still good.

 

Guangdong: refinery normal shipment, the market supply circulation is more abundant. In the morning, the quotation of the holder is about 20 yuan / ton for the 11 contract, but the receiver is not strong, and the transaction is concentrated around 10 yuan / ton for the 11 contract. Entering the second trading period, the market transaction is concentrated near the flat water of the 11 contract, and some of the holders are selling a small discount of 5 yuan / ton to the 11 contract. The market transaction is slightly boosted, and most of them are mainly received by traders. Downstream rigid demand procurement, the overall transaction atmosphere is slightly cooler than yesterday.

 

Tianjin: refinery shipments are normal today. In the market, the supply tension has eased slightly, but the overall situation is still tight. The quotation of high-priced brand source is concentrated in about 160-200 yuan / ton of 11 liter water, and the quotation of ordinary brand source is about 70-140 yuan / ton of 11 liter water. Disk finishing operation, rising water is still deadlocked, the market buying interest is lower, the shippers are more willing to ship, but the downstream receiving interest is not high, the holders slightly down the rising water, the downstream buying is slightly better. Overall, today's deal continues yesterday's light trend.

 

Inventory: as of October 18, the social inventory of zinc in the three places was down 4300 tons from October 14 and 2600 tons to 136400 tons from October 11. The decline in social inventories on Wednesday was mainly contributed by Guangdong, with die-cast zinc alloys mainly downstream of zinc consumption in South China. Downstream orders improved this week, and superimposed zinc prices fell slightly, boosting the willingness to buy and reserve downstream. Shanghai and Tianjin inventory decline is relatively limited, this week due to lead and zinc meeting in Shanghai trade market light trading, so inventory month-on-month changes. In addition, due to the haze reasons in Hebei Province, some steel mills and galvanizing plants have limited production, and the overall procurement is relatively limited.

 

Bonded area inventory: according to SMM, as of October 18, Shanghai bonded area zinc ingot inventory 84100 tons, a small drop of 500 tons from last week. It is understood that the incoming volume of zinc spindles from the market bill of lading to Hong Kong is about 3,000 tons. In addition, the outward volume is also around 3,000 tons. Offset by the increase or decrease, the stock of the bonded area has dropped slightly by about 500 tons.

 

Zinc price: last Friday, zinc received two Lianyang, the lower averages up to give a certain action energy, superimposed LME zinc inventory recorded a continuous decline, overseas to maintain a stable back structure, indicating that overseas spot supply may be relatively tight, but also support zinc prices. The LME zinc 0-3 liter discount was $33 a tonne on Friday. Although Shanghai zinc turned negative on Friday, but the high jump ran above the EMA, the KDJ index turned upward, indicating that Shanghai zinc may have a certain degree of upward action in the short term, superimposed three places social inventory recorded a decline, China's real estate and infrastructure data boosted market confidence, Shanghai zinc is expected to rise slightly within the day.

 

Today is expected: Lun zinc or range is expected to run at 2420-2470 US dollars / ton, Shanghai zinc main force 1911 contract or run at 18700-19200 yuan / ton. Domestic zinc increased by 140 yuan / ton

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