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[SMM analysis] the price difference between Shanghai and Guangdong was shipped to East China as scheduled.
Apr 22,2020 12:00CST
translation
Source:SMM
SMM4 22: Shanghai and Guangdong price spread within the week to expand again, according to SMM today zinc ingot quotation data show that Shanghai, Guangdong net price spread expanded to 190 yuan / ton. The widening of the price spread is in line with our expectations.
The content below was translated by Tencent automatically for reference.

SMM4 22: Shanghai and Guangdong price spread within the week to expand again, according to SMM today zinc ingot quotation data show that Shanghai, Guangdong net price spread expanded to 190 yuan / ton. The widening of the spread is in line with our expectations. In the previous article "widening the spread between Shanghai and Guangdong Zinc," we have reminded the two places that there is room for continued expansion of the spread and the profit opportunities for Guangdong zinc ingots to be sent to Shanghai.

 

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At present, in addition to the widening price difference, shipping charges have been significantly lower than in the past, and have also created greater profit margins for businessmen. According to Zhu Wenxi, manager of the freight forwarding marketing department of Guangdong Grui warehousing Management Co., Ltd., the current reduction in shipping rates is obvious. Goods shipped to Shanghai and Ningbo are less than 100 yuan, and shipments to Tianjin are cheaper, mainly because there are more goods from the north to the south than from the south to the north, resulting in a shortage of containers in the north. So the offer is even stronger. In terms of time, it will take about four days for Guangdong to ship to Shanghai and about six days for Tianjin, but as loading and unloading operations and short barge transportation may require an additional two days, the "door-to-door" shipment to Shanghai will take about 6-7 days and Tianjin 7-8 days.

At present, downstream of the market, traders have begun to ship goods from Guangdong to Shanghai, Ningbo, Tianjin, and other places. If they are interested in earning the current profit opportunities brought about by the widening price gap between the two places, they need to be prepared in time, because as the volume of inventory transfer increases, Guangdong holders are interested, while the subsequent increase in arrivals in East China will put pressure on the market transaction prices, thus limiting the room for the price gap between the two places to continue to widen. At the same time, the risk of narrowing spreads will increase.

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