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[SMM analysis] there is still room for reduction in zinc processing fees affected by the epidemic.
Apr 12,2020 20:54CST
The content below was translated by Tencent automatically for reference.

SMM4, 12 March:


From overseas, the epidemic has not yet come to an end, and there is little room to relax all the efforts made by countries to prevent and control the epidemic. The list of participants in the "national blockade", "state emergency" or similar measures continues to increase, which means that the probability of zinc foreign trade will remain light, but from the ingot end which is not profit-driven to the end of the mine. From the perspective of China's import structure, Australia and Peru are China's main trading partners, Peru's border blockade was further postponed to April 26, some of its domestic mining enterprises announced that they will continue to stop operation and wait for a change; At present, Australia has not heard the news that any enterprises have announced that the epidemic has affected production, but due to the severity of the epidemic, the ports of departure and transit are expected to be restricted to a certain extent. At present, the rapid decline in the volume of offers in the foreign trade market can be used as evidence, which means that the high probability of overseas supplies to China will be absent within 1-3 months.

At present, zinc prices have been expected to be repaired, and some of the domestic mining enterprises have returned to normal, which will temporarily alleviate the procurement pressure of smelters, but because of the loose fundamentals of the overall ore end, the level of raw material inventory of smelters is not high and the degree of dependence on imported mines is increasing at the same time, which means that after losing the support of imported mines, smelters will make more compromises in terms of processing fees.


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