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[minutes of SMM Morning meeting] TC raised the production willingness of smelters and relaxed the supply side to restrain the upward trend of Shanghai Zinc.
Jul 6,2020 09:38CST
The content below was translated by Tencent automatically for reference.

Summary of the morning meeting of zinc in SMM on July 6th


Spot fundamentals


Shanghai: smelter normal shipments, traders mainly shipments, morning market quotation stable at about 80 yuan / ton, weak transaction price down to about 75 yuan / ton, part of the low price to about 70 yuan / ton, but the transaction has not improved, the overall transaction is still weak, downstream to maintain on-demand procurement, Shuangyan, Chihong, import quotation is about 10 yuan / ton lower than the previous day, the overall transaction is slightly worse than the previous day. (bullish)


Ningbo: last Friday, the Ningbo market basically maintained the market quotation the day before yesterday. In the first period of the morning, Tiefeng Bao rose around 90 yuan / ton for the July contract, while the West Mining News rose 80 yuan / ton for the July contract, and a small amount of Kirin continued to hold down the price. the pre-sale report is up 90 yuan / ton for the July contract. Entering the second period of time, the rising water of the market is basically maintained at about 80,000,000 yuan / ton for the contract in July. Overall, the supply of goods in the Ningbo market has tightened slightly, mainly due to weak consumption and a shift in the shipping direction of some refineries. On Friday, downstream enterprises slightly replenished goods at the weekend, but overall trading is still light. (bullish)


Guangdong: in the first trading session, futures prices fluctuated in a narrow range, the price center of gravity moved upward as a whole, and there was insufficient willingness to purchase downstream. Last week, the market arrival increased, the pressure of shipments from the holders was greater, the spot rising water showed a low level, and the transactions between traders in the market were mainly done. Kirin, Mengzi, Huize and Danxia quoted prices for the Shanghai zinc contract in August, which rose 20 cents per ton, while Tiefeng rose 1030 yuan per ton. In the second trading session, traders mainly buy at low prices, but the price is too low, the willingness to ship goods decreases, the supply and demand sides show a slight stalemate, and the overall market transaction is general. Kirin, Mengzi, Lan Zinc quoted for the Shanghai zinc August contract rose 25 murals 30 yuan / ton. (bullish)


Tianjin: last Friday, Shanghai zinc remained volatile, the spot market maintained a rising discount price, and the price was relatively uniform. The ordinary brand Bering News quoted a rise of 140 yuan per ton for the 07 contract, and Hongyi quoted a rise of 150 yuan per ton for the 07 contract. Chi Hong quoted a rise of 140 yuan per ton for the 07 contract, and the high-priced brand Zijin offered a rise of 180 yuan per ton for the July contract, while Baiyin quoted a rise of 150 yuan per ton for the 07 contract. Yunxi Daily quoted a rise of 70 yuan per ton for the 07 contract, Xikuang (delivered to) quoted a rise of 60 million yuan per ton for the 07 contract, KZ/YP quoted a rise of 80 yuan per ton for the 07 contract, and Harbin Zinc (including the depot) quoted a rise of 50 yuan per ton for the 07 contract. Zinc prices remained volatile last Friday, Zijin brand will be dominated by long orders in the short term, overall market shipments have decreased, traders keep rising discount quotations; downstream, the downstream is still in need of weak procurement, the overall willingness to receive goods is flat. On the whole, the turnover was light last Friday. (bullish)


Inventory: according to SMM, as of July 3, the total inventory of SMM seven zinc ingots was 216600 tons, down 1800 tons from June 24 and 7300 tons from June 29. Social inventories recorded a decline this week, mainly contributed by the Tianjin area. This week, the arrival of goods in the Shanghai area is relatively normal, the downstream purchase intensity has improved with the rising water falling, the out of the warehouse is better, the storage in Guangdong area is less, the consumption in the lower reaches is temporarily weak, and the overall decline has been recorded slightly. Tianjin area arrives less this week, mainly because the smelter actively shipped last week, this week slightly adjust the delivery rhythm, out of the warehouse is relatively normal. Overall, the original inventory in Shanghai, Guangdong and Tianjin increased by 600 tons, while the inventory in seven places across the country decreased by 1800 tons. (lidocaine)


Bonded area inventory: according to SMM, as of July 3, the inventory of zinc ingots in Shanghai bonded area was 45000 tons, an increase of 1500 tons over last week. It is understood that this week, the amount of zinc ingots in the bonded area increased compared with the amount of zinc ingots out of the warehouse, and the imports of zinc ingots such as SMC and KZ in Hong Kong this week increased, but due to the gradual expansion of import losses, the amount of zinc ingots out of Overall, there was a slight increase of 1500 tons. (bad luck)


Today's forecast zinc price: last Friday Lunlun zinc received a negative column, the center of gravity further moved down, the lower break through the middle rail support of Brin Road, the upper 10-day moving average turned downward, and the KDJ opening expanded downward. LME inventories were flat on Friday, still high. At present, the overseas epidemic fermentation further suppresses the terminal consumption, the downstream destorming capacity is weak, the consumer end support is insufficient, and the upstream of Lunzhuang is restrained. Today focus on the support strength of the 40-day moving average. Last Friday, Shanghai zinc recorded two consecutive overcast, the center of gravity moved down, below the 20-day moving average support, MACD indicators into a dead fork. The zinc concentrate processing fee was raised for the first time in July, boosting the production will of the smelter, the supply side was loose, the consumer side was superimposed by the domestic traditional off-season and the development of overseas epidemic situation, and the downstream consumption was weaker than the previous month, restraining the action energy of Shanghai zinc. Pay attention to macro guidance in the short term.


Today's forecast: the price of lun zinc is expected to run in the range of US $2,050 per ton in 2000. It is expected that the contract price of Shanghai Zinc 2008 will run within the range of 16400 Mel 16900 yuan / ton, and it is expected that domestic zinc will drop 40 yuan / ton.

price forecast

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