SMM9 March 22: dragged down by the across-the-board decline in global financial markets last night, all non-ferrous metals were green, and Shanghai zinc fell nearly 2.6% in intraday trading. Today, the decline in the main 2011 contract of Shanghai zinc narrowed, with an intraday low of 19310 yuan per ton, and as of 13:45 it was tentatively reported at 19810 yuan per ton, down 1.49 per cent.
At present, the overseas epidemic situation is still grim. According to data, the cumulative number of confirmed cases of COVID-19 in the United States has exceeded 7.04 million, and the cumulative number of deaths has exceeded 204000. The great uncertainty of the epidemic is also the main cause of concern for the market. Follow-up attention will be paid to whether there is a second outbreak of the epidemic after the weather turns cooler.
From a fundamental point of view, recently, some smelters are worried about the ore supply in the fourth quarter, the winter storage time is ahead of schedule, and there is more demand from short-term smelters, which to a certain extent leads to a tight supply of zinc concentrate and a decline in domestic processing fees. According to the investigation of SMM, as of September 18, the TC of domestic zinc concentrate was 5300 yuan / metal ton, which was 200 yuan / metal ton lower than that of the week of September 11. The TC of imported mines has been falling since August, indicating that the supply of overseas zinc mines is also tight, and the supply side is expected to still have support.
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At the smelting end, under the stimulation of high profits, the production enthusiasm of the smelter is improved, mainly to increase production and resume production, and the output of refined zinc continues to climb. SMM expects refined zinc production to increase by 36900 tons to 545900 tons in September from a month earlier.
On the consumer side, on the eve of National Day, zinc prices are low downstream replenishment demand is strong, downstream consumer support is still there. Sub-section, galvanizing, the overall consumer performance is stable, such as Jiangsu enterprises in Indonesia store orders increased slightly. In terms of die-casting zinc alloy, overall orders increased steadily, and overseas orders are expected to increase by the end of the month. Zinc oxide, tire plate as the main support, it is expected that the short-term zinc oxide operating rate will be high and stable.
Overall, the shortage of supply at the mine end has become the main concern in the fourth quarter, superimposed on the eve of the National Day, zinc prices fell, downstream replenishment demand is better, consumption still supports zinc prices, and zinc prices are still bullish in the short term.