[SMM Analysis] Shanghai Zinc rose more than 2% in the short term and looked toward the front line of 21000.

Published: Sep 01, 2020 17:19 (GMT+8)

SMM9 March 1 News: today, the main 2010 contract of Shanghai Zinc once topped 20460 yuan / ton in intraday trading. As of today, it closed at 20450 yuan / ton, an increase of 2.35%.

SMM believes that the surge in zinc prices is mainly due to macro factors. On the one hand, Federal Reserve Vice Chairman Clarida said he was open to the future implementation of yield curve control measures, and said that policy makers may make "adjustments" to the latest "summary of economic forecasts" released in September.

Nuchin also said that if the trillion-dollar bailout is not enough, the government can do more, and hopes that U.S. Senate Majority Leader Mitch McConnell will introduce another aid bill for the COVID-19 epidemic next week.

China's official manufacturing PMI in August was 51.0%, down 0.1% from the previous month, indicating that the manufacturing sector as a whole is running smoothly. Overall, the macro mood is optimistic, the superimposed dollar index has fallen below 92, the lowest since May 2018, and the weak dollar has led to a rise in zinc prices.

From a fundamental point of view, from a supply point of view, the overhaul of domestic smelters is basically completed and normal production resumes. At the same time, according to SMM research, as of August 28, the processing fee of domestic zinc concentrate is 5550 yuan / metal ton, up 550yuan / metal ton from the previous lowest level of 5000 yuan / metal ton, smelter profits are further improved, and domestic supply is expected to increase month-on-month in the short term. Consumer side, in the context of gold, silver and silver, pay attention to inventory changes, but the short-term downstream of Tianjin environmental protection has an impact on consumption, the follow-up need to pay attention to the impact of environmental protection.

Today, zinc in Shanghai continued to pull higher, refreshing the new high of 20460 yuan / ton since May 2019. At present, the trend of zinc price is still strong, looking towards 21000 yuan / ton in the short term.

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