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[selected SMM Weekly] overseas economic stimulus boosts macro Shanghai and zinc fundamentals are weak and are expected to fall back.
Jul 4,2020 09:46CST
translation
Source:SMM
[smelter raw material inventory keeps safe level July zinc concentrate processing fee increases] this week, processing fees in various regions are generally increased by 150,000,200 yuan per metal ton, and processing fees in some areas are even increased by 300 yuan per metal ton compared with the previous month. At present, the level of raw material inventory in domestic smelters is relatively high, and the average inventory days of raw materials are basically more than 25 days, and with higher prices, the willingness of domestic mines to ship goods increases. The domestic concentrate supply increased month-on-month, and the imported zinc concentrate from the smelter arrived one after another, and the demand from the smelter was not high, so the domestic zinc concentrate processing fee was raised in July.
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"SMM Zinc Industry chain Weekly report" released, the weekly report SMM will select the hot topics, prices, market or major changes in the industry chain information released into a document for your reference.

The following is an excerpt from the weekly report of the zinc industry chain:

Zinc market forecast next week: in terms of Shanghai zinc, Shanghai zinc maintains a range of shocks this week. The performance of overseas employment data is eye-catching, and the macro mood has obviously picked up, but the boost for Shanghai zinc is relatively limited, mainly because the fundamental support is still weak. Next week, with the increase in domestic zinc concentrate supply, smelters' raw material stocks rebounded. Under last week's mining and metallurgical negotiations, zinc concentrate processing fees were raised for the first time in a year, with local increases of around 100m / t, boosting smelters' willingness to produce. In addition, Xing'an copper and zinc production resumes, Chifeng medium color enters the overhaul, and imported zinc is affected by ratio downwards. it is expected that it will be difficult to increase the inflow of imported zinc next week, which is basically the same as this week, so on the whole, the increment on the supply side is still greater than the reduction. From the consumer point of view, with the end of the rush brought by the semi-annual report, the orders of most galvanized enterprises fell, the start of galvanized sheet enterprises was relatively stable, the orders of galvanized pipe and other structural enterprises were more differentiated, and the profits of small and medium-sized enterprises were poor; alloy enterprises weakened again, the smelter squeezed orders and domestic demand came together, and the orders remained weak. The zinc oxide plate is stable and good, and the warming of the automobile plate drives the zinc oxide enterprises to start work. On the whole, there is still no bright spot on the consumer side. From a technical point of view, the lower 20-day moving average support is stronger, but the MACD index is about to become a dead cross, indicating that Shanghai zinc may have downward momentum. Although the fundamentals are weak, the macro positive mood is strong, and it is expected that Lun Zinc may fluctuate in the range of the 20-day moving average. Overall, Lun Zinc is expected to run at US $2,050 per ton next week; 2008 of the main contract for Shanghai Zinc is expected to run at 16550 Mel 17150 yuan / ton, and the spot side is expected to raise water around 40 Mel 80 yuan / ton in July.

Processing fees: the negotiations on zinc concentrate processing fees at smelters in various regions this month have been concluded one after another. according to SMM research, processing fees in various regions have generally increased by 150,000,200 yuan per metal ton, and processing fees in some areas have even increased by 300yuan / metal ton compared with the previous month. At present, the level of raw material inventory in domestic smelters is relatively high, and the average inventory days of raw materials are basically more than 25 days, and with higher prices, the willingness of domestic mines to ship goods increases. The domestic concentrate supply increased month-on-month, and the imported zinc concentrate from the smelter arrived one after another, and the demand from the smelter was not high, so in July, the domestic zinc concentrate processing fee was raised centrally. In terms of imported ore, the domestic mainstream is still reported at 150-160 US dollars / dry ton, and the forward shipping price is around 170 US dollars / dry ton.

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Catalogue of "SMM Zinc Industry chain Weekly report" in this issue

Main points of this weekly report: processing fees, import profit and loss inventory

Hot spots in the zinc industry: the impact of the epidemic situation of the month-on-month decline in zinc concentrate imports in May has not yet been fully reflected.

Zinc concentrate market: smelter raw material inventory maintains a safe level. Zinc concentrate processing fees increased in July.

Refinery dynamics

Import zinc market: the import window is still closed and difficult to open in a short period of time.

Zinc market forecast next week: overseas economic stimulus boosts macro Shanghai zinc fundamentals are weak and are expected to decline

Review of Zinc City: the Economic data is good and the fundamentals of VS are weak. Zinc prices are in a dilemma.

Galvanizing: off-season affects demand for structural parts consumption of galvanized sheet warms up compared with the previous month

Die-casting zinc alloy: low consumption of die-casting zinc alloy some factories continue to reduce production

Zinc oxide: zinc oxide starts smoothly and maintains just what it needs to purchase

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