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[minutes of SMM Morning meeting] the rapid elimination of social inventory supports the upward trend of zinc in Shanghai.
Jul 27,2020 09:32CST
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Source:SMM
The content below was translated by Tencent automatically for reference.

 

Minutes of the morning meeting of zinc in SMM on July 27th

 

Spot fundamentals

 

Shanghai: zinc fell back at a high level, and the morning market was dominated by receiving goods. Domestic water still rose by about 60 yuan / ton, and the turnover gradually increased. Some traders tried to raise the quotation to about 70-80 yuan / ton, and there was also some transaction feedback. The downstream buys on demand whenever it falls, and the market transaction is better than the day before yesterday. (lidocaine)

 

Guangdong: in the first trading session, although the price is high, the overall price is still high, the shipping sentiment of the holder is high, the quotation is relatively positive, the downstream is mostly wait-and-see, and the market demand is general. Shengshui quotes Kirin, Mengzi, Huize, Tiefeng quotes 0-10 yuan / ton for Shanghai zinc contract in September. The second trading session, prices continue to fluctuate downward, downstream bargain slightly supplement weekend usage, individual holders slightly cherish the selling price, the market transaction is better than the first trading session. Kirin, Mengzi, Huize and Tiefeng quoted a price of 0-10 yuan / ton for the Shanghai zinc contract in September. (lidocaine)

 

Ningbo: zinc prices rose sharply last Friday, the supply of goods in Ningbo market is tight, traders are willing to raise prices and are unwilling to ship goods at low prices. In the first trading session, Tiefeng reported a rise of 100 yuan per ton for the August contract, a positive price for the West Mine around 100 yuan per ton for the August contract, and Nanhua around 100 yuan per ton for the August contract. Huize reported around 150 yuan / ton for the August contract. Overall, zinc prices rose sharply last Friday, downstream enterprises' willingness to buy weakened obviously, and there were few transactions in the market. (bullish)

 

Tianjin: last Friday, Shanghai zinc shot up and fell back, and the spot market maintained a rising discount price, which was relatively uniform. The ordinary brand Bering News quoted a rise of 150 yuan per ton for the 08 contract, and Hongyi quoted a rise of 180 yuan per ton for the 08 contract. Chi Hong quoted a rise of 170-180 yuan per ton for the 08 contract, while the high-priced brand Zijin quoted a rise of 210-220 yuan per ton for the August contract, while Baiyin quoted a rise of 180 yuan / ton for the 08 contract. Ha zinc (including out of the warehouse) is quoted at 70-80 yuan / ton for the 08 contract. Zinc prices rose and fell last Friday, the Tianjin market is short of spot liquidity, traders bid shipments; downstream, the downstream maintained rigid demand procurement last Friday. (bullish)

 

Inventory: according to SMM, as of July 24, the total inventory of SMM seven zinc ingots was 198900 tons, down 7800 tons from July 17 and 6200 tons from July 20. Inventory fell sharply last week, mainly contributed by Shanghai and Tianjin. The Shanghai area dropped more than 4000 tons, mainly because the arrival of goods was affected by the flood in the south, and the pace of entering the warehouse was affected, while the willingness of downstream enterprises to buy every fall last week improved, and the overall decline was recorded. Tianjin area is subject to a slight problem with the arrival of the warehouse, the amount of incoming goods is reduced, and the output of the warehouse is relatively normal. The lower reaches of Guangdong has gradually warmed up, and the willingness to buy has improved, recording a slight decline. Overall, the original inventory in Shanghai, Guangdong and Tianjin fell by 7800 tons, while the inventory in seven places across the country dropped by 7800 tons. (lidocaine)

 

Bonded area inventory: according to SMM, as of July 24, the inventory of zinc ingots in Shanghai bonded area was 44100 tons, down 1900 tons from last week. It is understood that last week, with the import loss narrowed slightly, some zinc ingots coming to Hong Kong were imported to China, driving the efforts to get out of the warehouse. The arrival of the goods is relatively normal, and under the offset of difference, the inventory of zinc ingots in the bonded area as a whole recorded a slight decline of 1900 tons last week. (lidocaine)

 

Today's forecast zinc price: last Friday Lun zinc recorded a negative column, the lower 10-day line support is obvious, MACD positive column narrowed. Last Friday, LME inventory increased by 4450 tons to 154500 tons, or 2.97%. Against the background of the continuous fermentation of the overseas epidemic, trade disputes between China and the United States have resumed, the market risk aversion mood has risen, and Lunzinc is weak, but the decline has narrowed somewhat due to the positive data of total sales of new homes in the United States in June and manufacturing data in July. Pay close attention to the development of Sino-US trade in the short term. Last Friday, Shanghai zinc recorded a positive pillar, the lower 10th line to provide support, KDJ indicators to become a golden fork. Macroscopically, the US data is good to drive, and under the background of domestic peak season consumption expectations, the social inventory is deconstructed faster, and the fundamental support is temporarily strong, boosting the trend of Shanghai zinc, but Sino-US relations increase short-term risk factors.

 

Today's forecast: the price of lun zinc is expected to operate in the range of 2200-2250 US dollars per ton. The contract price of Shanghai Zinc 2009 is expected to run in the range of 17900-18400 yuan / ton, and domestic zinc is expected to rise by 10 yuan / ton.

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