[SMM analysis] the fundamentals of Shanghai Zinc Lian Green 6 are not so bad! It is expected to stabilize after the panic.

SMM9 March 9: the three major indexes of US stocks fell sharply, superimposed on the opening limit of crude oil today, and the pessimistic atmosphere of the market was strong, which put pressure on the non-ferrous metals market, with Shanghai zinc bearing the brunt of the decline. Today, the main 2010 contract broke down to 19220 yuan / ton, and as of 10: 00 today, 19365 was tentatively reported at RMB / ton, a decrease of 2.47%.

Macro factors have led to a sharp drop in zinc prices. from the perspective of zinc fundamentals, on the supply side, although the processing fees for zinc concentrate in some areas are down from the previous month, the comprehensive processing fees for zinc concentrate are still at a high level, and the profits of smelters are OK, and they are in the process of continuing to increase production and resume production. in addition to the new maintenance of individual plants, smelters in Henan, Guangdong and Inner Mongolia have finished overhauling and gradually resumed production, and refined zinc is expected to increase in September.

On the consumer side, galvanizing, at present, most enterprises in Daqiuzhuang in Tianjin have basically resumed production, and terminal orders in various regions have stabilized, such as orders for iron towers in Hubei enterprises. Overall, overall orders increased, with new orders expected to arrive in mid-September and an increase in Electroweb project orders on arrival. In terms of die-casting zinc alloy, overall orders are steadily rising, such as Fujian enterprises' African auto parts orders and domestic hardware are getting warmer, and the "Golden Nine Silver Ten" consumption season is worth looking forward to. As for zinc oxide, due to the gradual warming of automobile production and sales data, the tire plate performed better.

On the whole, the pressure on the supply side is greater, the performance of the consumer side is better, the expectation of superimposed infrastructure consumption is strong, the inventory of social inventory and bonded areas is low, and the fundamentals of zinc are good, so SMM believes that zinc prices are expected to stabilize after market panic.

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