[market change] Zinc consumption in Shanghai is temporarily weak & lack of Raw Materials to alleviate the expected upward shock of Zinc Price

SMM4 9: since April 2 Shanghai zinc continued to rebound, Shanghai zinc continued shock market. Today, the Shanghai zinc 2006 contract opened higher and lower, with the lowest reported at 15540 yuan / tonne. As of today, it closed at 15555 yuan / tonne, down 0.8 per cent.

At present, there are more than 1.5 million confirmed cases of the new crown epidemic in the world, including more than 420000 confirmed cases of new crown pneumonia in the United States. There is still no inflection point in the overseas epidemic. In terms of fundamentals, the recent rise in zinc prices and the reduction of superimposed processing fees are conducive to boosting the mood of mine shipments and alleviating the problem of insufficient raw materials in smelters. According to SMM research, China's refined zinc production in March in SMM was 464200 tons, an increase of 2.48% over the previous month, and an increase of 2.67% over the same period last year.

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However, the domestic downstream consumption is still weak, although the galvanized structure and galvanized sheet downstream orders are better, but the inventory is still high. The increase of zinc orders in die-cast zinc alloy and zinc oxide plate is poor and affected by the overseas epidemic situation, and the export orders are blocked. On the inventory side, as of April 7, SMM seven places had a total inventory of 297400 tons of zinc ingots, an increase of 4800 tons from Friday, with a small increase in inventory. Overall, SMM expects short-term zinc prices to be weak.

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