The domestic zinc price may continue to follow passively [SMM Zinc Weekly selection]

Published: Apr 9, 2022 08:35

Source: SMM

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[SMM Zinc Weekly selection: overseas stocks may continue to passively follow domestic zinc prices] Lun Zinc, two situations this week. One is that Tektronix Resources has signed an annual zinc concentrate contract, raising processing fees by 45% to $230 per dry ton. At the same time, an automatic adjustment clause has been signed: if the zinc price exceeds US $3800 per ton, the processing fee will increase by US $0.050 per ton, but if the zinc price falls, the processing fee will remain unchanged (the same as the domestic 28-share mechanism). This price can be seen, in the case of reduced production in Europe and China's refusal to mine imported mines, overseas mines.

The following is an excerpt from the weekly report of the zinc industry chain:

In terms of zinc, there are two situations this week. One is that Tektronix Resources has signed an annual zinc concentrate contract, raising processing fees by 45% to $230 per dry ton. At the same time, an automatic adjustment clause has been signed: if the zinc price exceeds US $3800 per ton, the processing fee will increase by US $0.050 per ton, but if the zinc price falls, the processing fee will remain unchanged (the same as the domestic 28-share mechanism). At this price, we can see that with the reduction of production in Europe and China's refusal to mine imported minerals, the supply of overseas mines has changed from shortage to surplus. Then in the future, we can pay attention to whether the processing fees in Europe will rise further to ease the cost pressure of smelters under high electricity prices, so as to resume production. The second is that the energy problem in Europe continues, while the reduction in production at smelters due to energy is exacerbating the shortage of zinc ingots in Europe, and lme stocks have been significantly removed during the week, while the reason behind the successive increase in write-off orders is that Trafigura is drawing zinc stocks from the warehouse of the London Metal Exchange on a large scale to make up for the supply gap caused by the reduction in production in Europe. At the same time, we see that the concentration of positions in overseas bulls is quite high, and we do not rule out the possibility of forcing positions in the future. On the whole, before the resumption of production in Europe, the results brought by the current fundamentals are still optimistic, and there is still the possibility of strengthening. Considering the current risk, it is suggested that we should wait and see. It is expected that Lun Zinc will run at 4100-4500 US dollars per ton.

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Catalogue of this issue "SMM Zinc Industry chain Weekly report"

Main points of this weekly report: processing fees, import profit and loss inventory

Hot spot of Zinc Industry: investigation on the production situation of SMM Zinc Refinery

Zinc concentrate market: the month-on-month increase of refined zinc output from March to April is lower than the market expectation.

Refinery dynamics

Imported zinc market

Zinc City predicts next week: overseas stocks may continue to follow passively at home.

Review of Zinc City: energy pulls up, Federal Reserve cools Shanghai Zinc follows Zinc's ups and downs

Galvanizing

Die casting zinc alloy

Zinc oxide

[China Zinc Industry chain High-end report] SMM exclusive monthly survey of zinc industry chain report, covering from zinc concentrate to zinc primary consumer operating rate and supply and demand profile. And announce the exclusive monthly zinc concentrate, refined zinc balance, continue to track the industry entity enterprises, update data. And make a simple prediction of the future trend of zinc through the supply and demand situation and data model. "View details

Weekly report Zinc Price Price Forecast output inventory

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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