SMM Review of China Spot Zinc Markets

Published: Mar 16, 2023 16:29 (GMT+8)

Source: SMM

Save

Spot quotes in east China have moved rangebound since mid-February. The inventory accumulation during CNY holidays led to ample supply in the market, while the high zinc prices dampened downstream purchasing interest. Spot premiums turned from 30 yuan/mt into discounts of 25 yuan/mt amid tepid trades.

SHANGHAI, Mar 16 (SMM) – Spot quotes in east China have moved rangebound since mid-February. The inventory accumulation during CNY holidays led to ample supply in the market, while the high zinc prices dampened downstream purchasing interest. Spot premiums turned from 30 yuan/mt into discounts of 25 yuan/mt amid tepid trades. In late February, demand gradually strengthened and procurement increased, benefiting from the drop in zinc prices and the production resumption at most downstream producers. Improving trading helped spot quotes stop falling and rebound. Previous stockpiling resulted in subdued trades in early March. Some sellers raised prices but spot quotes moved at low levels due to sluggish trades. South China saw higher spot quotes, though.

In mid-February, spot quotes changed little as downstream producers had not fully resumed production and mainly worked through inventory. Meanwhile, arriving shipments were limited. A combination of production resumption at most downstream producers and tight supply of cargoes in the market bolstered spot discounts to narrow from 65 yuan/mt to 20 yuan/mt. Spot quotes stopped rising in March with cargoes under warrants offered for sale and a slight increase in arriving shipments. Spot quotes in north China weakened.

In mid-February, due to the weak pre-holiday stockpiling and the early production resumption, spot discounts hovered around 40 yuan/mt. Slow growth of orders kept market procurement weak, and poor trading lowered spot quotes. Entering March, production restrictions driven by the Two Sessions of NPC and CPPCC forced some enterprises to lower their operating rates. Spot quotes were rangebound amid weak demand and supply.

Market

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.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

1 hour ago

End-use demand underperforms, zinc oxide operating rates edge down [SMM Zinc Oxide Weekly Review]

[Poor end-use demand performance, zinc oxide operating rate edges down] From the perspective of end-use demand performance, in the rubber-grade zinc oxide sector, tire enterprise orders are generally weak, and purchases of zinc oxide remain just-in-time; orders in the desulfurization field perform poorly, with demand remaining sluggish...

1 hour ago

Die-casting zinc alloy operating rates trend lower, expected to decline further next week [SMM die-casting zinc alloy weekly review]

[Operating rate of die-casting zinc alloy declines, expected to fall further next week] The operating rate moved lower this week, mainly because some enterprises scheduled maintenance during the week, dragging down the overall operating level. In addition, some small and medium-sized enterprises have recently been affected by high prices, with weaker order performance, and there have been cases of proactive production control, which also weighed on the operating rate.

1 hour ago

Pre-holiday Stockpiling Drives Inventory Decline, Zinc Prices Consolidate at Highs [SMM Zinc Futures Brief]

[Pre-holiday stockpiling drives inventory decline, zinc prices consolidate at highs] The most-traded SHFE zinc 2611 contract opened at 26,740 yuan/mt. After the open, SHFE zinc consolidated around the daily average, touching an intraday high of 26,855 yuan/mt in early trading and a low of 26,690 yuan/mt during the session, before closing up 50 yuan/mt, or 0.19%, at 26,760 yuan/mt. Trading volume increased to 72,614 lots, and open interest rose by 2,140 lots to 148,000 lots.

1 hour ago