[SMM analysis] the outflow of Guangdong zinc ingots in April will be difficult to sustain in May.

SMM5月9日讯： 4月广东锌锭出库量环比大幅增加，同比亦有明显改善。在出口订单大幅萎缩的背景下，以压铸锌合金消费为主的广东市场出库量却逆势增加，我们认为，出库量增加部分主要是由库存转移所致。

"Click to view the SMM zinc industry chain database

In April, the price gap between Shanghai, Guangdong and Tianjin widened, the price difference between Shanghai and Guangdong widened to around 200 yuan per ton, and the price difference between Tianjin and Guangdong exceeded 300 yuan per ton. in the case of a reduction in shipping charges, the price difference far exceeded shipping costs. Traders and downstream purchases of zinc ingots from Guangdong have increased significantly, and we estimate that the total amount of inventory transfer is more than 15,000 tons. If the part of inventory transfer is excluded, we find that the actual output of Guangdong has decreased compared with the same period last year, which is also consistent with what we have learned from the downstream survey. Through our investigation of die-casting zinc alloy factories in Guangdong, we know that the demand of some factories has dropped by 30% month-on-month, mainly due to the decline in demand caused by the sharp drop in overseas orders, while the lower reaches replenished zinc ingot stocks when zinc prices fell in March. Terminals also increase purchases when prices fall, overdrawing some of the demand in April ahead of schedule. However, on the whole, galvanizing consumption is relatively good, battery factory demand is stable, and some brass factories to use electrolytic copper price zinc ingots for production, increase the purchase of zinc ingots, boost the overall demand, support the Guangdong market zinc ingot output.

In May, the orders of the die casting zinc alloy factory still did not improve significantly, and the successive rise in zinc prices further suppressed the replenishment demand, and the short-term output also decreased significantly compared with the previous period. Although there is still a price difference of 100 yuan between the two places, as imported zinc flows into the domestic market, it is expected that the amount of subsequent shipments from Guangdong to Shanghai and Tianjin will be limited, as imported zinc flows into the domestic market. Monthly shipments in Guangdong are expected to decline.

"Click to sign up for SMM" 2020 (15th) lead and Zinc Summit

Scan the QR code in the picture to sign up for the lead-zinc summit and fill in the personal information on the last page. The meeting staff will contact you later!