SMM5 May 27: according to SMM research, since the middle and late March, the domestic zinc ingot social inventory showed an overall downward trend, but since May, the zinc ingot destocking range is slow. As of May 25, the total inventory of SMM zinc ingots in Seven places was 222100 tons, down 3600 tons from May 22 and 5600 tons from May 18.
"Click to view the SMM zinc industry chain database
The main reasons for the slow removal of zinc ingots in society are as follows:
In terms of storage, as more overseas countries restart their economies, overseas mines are in a process of gradual recovery. Peru, for example, is China's second largest importer. The country's large open-pit mines and some underground mines have been granted permission to restart operations in the first phase, and the second phase will see a second batch of mining companies resume mining activities. In addition, the monthly import volume of zinc concentrate was refreshed in April, and it is expected that the import volume of zinc concentrate will decline in May due to the influence of Peruvian mines, but due to the continuous reduction of domestic mine processing fees, profits have been repaired, and the willingness to ship has picked up somewhat. To sum up, the shortage of supply at the mine end has been alleviated, and some smelters have postponed the maintenance plan, so the storage volume has been increased to a certain extent.
From the point of view of leaving the warehouse, galvanizing drives the main consumption of galvanization. at present, the operating rate of large-scale galvanizing enterprises remains high, and terminal consumer orders remain stable. Recently, the two sessions have proposed to strengthen the new infrastructure, but it will take some time for the specific transmission to the order side. And as the early rush orders are basically completed, the recent orders are worse than before. In terms of die-casting zinc alloy and zinc oxide, the current overseas orders have not improved significantly, the pull of domestic demand is relatively limited, and the overall performance is still poor.
SMM believes that social stocks of zinc ingots will still be removed in the short term, but at a relatively slow pace.
Focus on the development prospect and price trend of lead and zinc industry
In 2019, global trade disputes escalated, the global economy was under pressure, and central banks began a wave of interest rate cuts. At the same time, the meeting of the political Bureau of the CPC Central Committee stressed that at present and for some time to come, the basic trend of China's economic stability and long-term improvement will remain unchanged, and 2020 will also be the year when China will build a moderately prosperous society in an all-round way and the 13th five-year Plan ends. In this context, the new crown virus is rampant all over the world, and it is worth looking forward to how to achieve steady economic growth.
In the zinc market, the production of overseas mines increased step by step in 2019, but the production of domestic mines was repeatedly hindered. In the first quarter of 2020, zinc prices fell below the mine cost line, and mine profits plummeted. How will the profits of smelters and mines be distributed in 2020? can overseas mines be expected to be put into production under the disturbance of the epidemic? In addition, the output of domestic zinc refining smelters broke through the bottleneck and set a new record in 2019, but under the disturbance at the supply end of zinc mines in 2020, can the capacity utilization rate of smelters maintain a high load? Whether the infrastructure investment under the tone of "stabilizing the economy" in 2020 can exceed the expected performance, whether the galvanizing industry can exceed the seasonal performance is still worth looking forward to, and the contradiction between supply and demand of zinc may be reversed in 2020, so paying attention to and distributing structural opportunities is another choice. Can zinc prices fall and rise in 2020?
In response to the above topics, SMM will invite industry celebrities, industry professionals, enterprises from the upper and lower reaches of the industrial chain to hold the "2020 (15th) lead and Zinc Summit" in Changsha to jointly discuss the current situation and problems of the industry, as well as the future development prospects, and analyze the fundamentals and the future trend of zinc prices.
Click to sign up for SMM 2020 (15th) lead and Zinc Summit
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