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[brief Review of Zinc in SMM] Post-festival Zinc Price has limited downward space to maintain strong internal and external weak trend
May 5,2020 19:20CST
The content below was translated by Tencent automatically for reference.

SMM5, April 5: April 30 Lun zinc rushed to a short-term high of $1957.5 / ton, but in the evening the mainstream US media reported that Trump will take retaliatory action against the new crown epidemic, the market will be alert to the risk of new trade frictions, superimposed on the United States bleak economic data led to increased pessimism in the market, Lun Zinc returned to a weak down market. During the May Day holiday, Europe and the United States began to resume work one after another, but the epidemic has not really alleviated, the follow-up situation is not optimistic, overseas consumption is still at a low ebb. On the inventory side, lme inventories increased by 3250 tons to 100675 tons, an increase of 3.34 percent, breaking through the 100, 000 mark again. In a pessimistic mood, Lun Zinc recorded three consecutive negative conditions. As of 17: 30 on May 5, Lun Zinc was down $52.50 / tonne, or 2.69 per cent, to $1902.5 / tonne.

Zinc price outlook: on the supply side, in May, the shortage of imported mines may be further aggravated, and the processing fees of imported ores may fall further. Under its influence, some domestic mines may maintain a small number of shipments or only produce and not sell, forcing smelters to reduce processing fees. However, the shortage of zinc concentrate may be gradually transmitted to the smelting end, and the domestic production of zinc ingots is expected to decline slightly.

On the consumption side, consumption in May is expected to be slightly lower than in April. Among them, the galvanized plate, driven by infrastructure, is expected to remain high, driving domestic zinc consumption. However, due to the impact of export orders, the overall start-up of the die-casting plate will fall back from April. However, due to the low production enthusiasm of automobile enterprises, the tire operating rate may maintain low concussion, and it is expected that the starting situation of zinc oxide may be slightly lower than that in the early stage.

In terms of inventory, as of April 30, the total social inventory of zinc ingots in SMM Seven places is 229600 tons, and it is expected that the high probability will remain in the warehouse after the festival.

To sum up, it is expected that the downward space of zinc prices after the festival is limited, and will still maintain the trend of strong and weak inside and outside. It is expected that the Shanghai zinc 2007 contract will maintain a short-term shock of 15700-16400 yuan / ton, while Lun Zinc is concerned about the integer support of US $1900 / ton. Be alert to the reduction of production at the end of the world, superimposed transport restrictions or aggravate the shortage of raw materials in smelters around the world.

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