SMM11 March 17: in order to further understand the environmental changes of the lead and zinc industry, the lead and zinc market trend, the future development trend of the industry, to help the majority of users grasp the metal price trend, brake more appropriate business strategy. SMM and Shanghai Futures Exchange held the last metal forum and SMM lead and zinc industry online meeting today.
At the meeting, Wang Zhongshuai, chief analyst of Mengzi Mining and Metallurgical Co., Ltd., brought a keynote speech on "the global macro-environment is volatile, where will zinc prices go?"
Wang Zhongshuai said that the supply of zinc concentrate is still tight in the first quarter of next year, and zinc prices will be strong in the base metals before the supply of zinc concentrate is loose.
Zinc ore supply
Affected by the epidemic this year, the supply of zinc concentrate ended the continuous growth trend. Overseas outbreaks mainly affected April and May, after which zinc concentrate production has recovered rapidly. On the one hand, the processing fee is affected by market supply and demand, on the other hand, it is also affected by the price of zinc. The level of processing fees can better reflect the balance of supply and demand of zinc ore.
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This year, the raw material inventory of domestic zinc smelters is basically at a low level in recent years. Port inventories fluctuate around 150000 tons, which is not high compared to the 14-15 high.
Prospect of Zinc concentrate supply in 2021
1. The increment of overseas zinc concentrate in 2021, on the one hand, comes from new construction and expansion, on the other hand, it comes from the recovery of reduced production affected by the epidemic.
two。 The growth rate of zinc concentrate supply is relatively low in recent years, and under the circumstances that the overseas epidemic situation has not been brought under control, the growth rate of overseas zinc concentrate supply in 2021 is expected to be slow, and the actual increase may be less than expected.
3. Under the current domestic environmental protection situation, the start-up of many small mines may be difficult to resume, and the growth rate of domestic zinc concentrate supply is expected to be limited.
4. We judge that there will be a small surplus of 100000 tons of zinc concentrate next year, but we should pay attention to the impact of the epidemic on production.
Supply and consumption of zinc ingots
The global output of zinc ingots was relatively low from 2016 to 2018, and increased significantly in 2019. This year, the output of zinc ingots was less affected by the epidemic, and the output continued to increase. There will be 200000 tons of new smelting capacity in China in 2021, and the increase in mine production can continue to drive the increase in zinc ingot production. Under the condition that there is no problem with environmental protection, there is no bottleneck in smelting capacity.
The operating rate of zinc smelter is highly related to the processing fee of the refinery. With the growth of mine supply, the processing fee of the smelter is expected to remain at a good level, and refinery start-up is expected to remain at a high level next year as a whole.
Domestic downstream consumption
Galvanizing is the most important area of zinc ingot consumption. After the recovery of the domestic epidemic situation, the operating rate of galvanizing has reached a new high in recent years.
The operating rate of zinc oxide basically rebounded to the level of the same period last year.
The operating rate of die-casting zinc alloy is worse than that in previous years, but the alloy output of the smelter is increasing this year, and the alloy of the smelter squeezes the market of traditional alloy enterprises. This year, China has imported more zinc scrap, which can replace the consumption of zinc ingots to a certain extent, but in this case, the inventory performance of domestic zinc ingots is still relatively good. Domestic zinc ingot inventory is at a low level in the same period, under the high supply, domestic consumption still maintains a good growth, inventory situation is good.
Prospect of Zinc Market
1. Macroscopically, under the impact of the epidemic, the United States and Europe are expected to continue to maintain low interest rates, and the coming of the new president of the United States is conducive to the introduction of fiscal stimulus policies, which is good for commodity prices as a whole.
two。 Stocks of zinc ingots have rebounded to a medium level this year. The oversupply is expected to continue next year, which will put pressure on the rise in zinc prices.
3. The supply of zinc concentrate is still tight in the first quarter of next year, and the price of zinc will still be strong in the base metals before the supply of zinc concentrate is relaxed.
Hit the point!
In 2020, due to the spread of the epidemic, zinc in Shanghai was hit hard, with the lowest level of 14265 yuan per ton since the beginning of the year, the lowest since March 2016. Later, as the domestic epidemic was brought under control, zinc prices gradually rebounded, closing at 20290 yuan / ton as of today, an increase of 13.07 percent for the year. However, the overseas epidemic situation is still severely superimposed by the uncertainty of macro events such as the US election, and we still need to pay attention to the dynamics of the overseas epidemic.
In terms of zinc fundamentals, the output of refined zinc has reached an all-time high. As the current zinc price is in a relatively high position, the profits of the smelter are OK, and the higher production enthusiasm is superimposed into the end of the year. In order to achieve the production target for the year, there are still rush production requirements at the end of the year, and refinery start-up will remain high in the fourth quarter. Overall, the supply of refined zinc is still in excess. Downstream consumption is weaker than before. Overall, there is limited room for zinc prices to rise. What will be the trend of zinc price in 2021?
It is also a critical moment for the annual TC negotiation between domestic smelters and overseas mines, and the final benchmark price has become a major weather vane for the industry to measure the supply-side market in the coming year, which has attracted much attention and discussion in the market. At the 2020 China Nonferrous Metals Industry Annual meeting and long-term Carnival to be held on December 3-4, 2020, SMM invites macroeconomists, representatives of mining giants and senior analysts of SMM to analyze the future trend of zinc prices and the bright spots of zinc consumption in the future, and jointly explore the way for the development of the industry to create the future!
"Click to learn and sign up: 2020 China Nonferrous Metals Industry Annual meeting
