[SMM analysis] Shanghai Zinc's return to Wan Ba has a significant impact on macro-emotion.

SMM7: recently, EU leaders reached an agreement on a "recovery fund" totaling 750 billion euros and the EU budget for the next seven years, which means that the EU will begin to implement the largest economic rescue plan in history.

U.S. Treasury Secretary Mnuchin said the Trump administration is expected to launch the fourth phase of the New Crown pneumonia pandemic relief plan by the end of this month, with more than $1 trillion in aid.

Supported by the news that new coronavirus candidate vaccines are being developed by Oxford University and AstraZeneca, positive progress has also been made in vaccines being developed by companies such as Pfizer and biotech company BioNTech.

Macro events such as a major breakthrough in vaccine research, an agreement on an economic stimulus package in the European Union and a plan to be launched in the United States have made the market optimistic, with the dollar index falling to a four-month low, boosting the non-ferrous metals market to some extent. Among them, 2009 of Shanghai zinc is about 18330 yuan / ton, and by noon it closed at 18095 yuan / ton, standing above 10,000 yuan, an increase of 1.54%.

SMM believes that the rise in zinc prices is mainly due to macro sentiment, supported by optimistic expectations of domestic consumption, strong performance of zinc in Shanghai, short-term zinc prices are expected to be mainly range shocks, and pay attention to the development of Sino-US trade in the short term.

"Click to view the SMM zinc industry chain database

In terms of fundamentals, due to the recent rebound in domestic zinc concentrate processing fees, according to SMM research, as of July 17, the domestic zinc concentrate processing fee is 5200 yuan / metal ton, which is 200 yuan / metal ton higher than the lowest point of 5000 yuan / metal ton, superimposed refinery overhaul is completed in the first half of the year, and is in the process of increasing production and resuming production, the follow-up supply is expected to increase month-on-month.

On the consumer side, galvanizing, due to the squeeze of galvanized tube enterprises' profits, and even production losses in some areas, only some enterprises are able to retain profits due to the large amount of reserves in the previous period, and the overall production is lower than before. As for galvanized structural parts, orders show signs of warming up, superimposed Hebei enterprise scaffolding is still a strong support, terminal projects in some areas will start in early August. Galvanized sheet, home appliance demand with strong toughness superimposed export orders have improved. Die-casting zinc alloy plate, the current terminal overseas order improvement is not obvious, China has entered the off-season of traditional consumption, the overall demand has shrunk. Zinc oxide plate, domestic demand remains stable, tire sector performance is still good, enterprise feedback orders do not show signs of decline, while chemical orders are still in peak season, order performance is also good, while feed orders performance is slightly worse. On the whole, the downstream consumption of zinc in the future is worth looking forward to.

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!