Overseas Oversupply Pressure Intensified As Significant Decline In Demand Turned Overseas Invisible Inventories Into Visible Inventories Rapidly

Market concerns over an overseas recession lingered in April. The Fed’s Beige Book pointed out that the US economic growth had stagnated, and existing home sales in the US in March were lower than expected. Fundamentally, production resumption at European smelters, coupled with weaker overseas consumption, weighed on LME zinc prices.

Domestic refined zinc output in April stood at 540,000 mt and exceeded expectations. In terms of demand, galvanising demand was relatively robust overall, but the demand for die-casting and zinc oxide was poor. Inventories are likely to have dropped in April due to buying on the dip. Higher supply and weak demand kept SHFE zinc prices at lows.

On the whole, the significant decline in overseas demand turned overseas invisible inventories into visible inventories rapidly, growing oversupply pressure. Although domestic demand has peaked, there will be additional output cuts driven by power rationing. As such, SHFE zinc will continue to outperform LME zinc. But given the import losses above 1,000 yuan/mt, the import window is unlikely to reopen soon. The import volume of refined zinc will drop in the near term.

More popular news:

'Bond King' Jeffrey Gundlach Says Sharp Fed Rate Cuts By Year-End Will Push Up Gold Prices

Rio Tinto Warns of Risks for Paying High Premiums for Lithium Mines after Plunging Lithium Prices Triggered Acquisition Rush

Citigroup Warns European Commercial Real Estate Values Will Plummet 40%, But Sees Medium-Term Opportunity

IMF: US Debt Defaults Will Take a Heavy Toll on Global Economy, Global GDP Growth Can Plunge

Goldman Sachs Warns of Serious Risks US Dollar Will Lose Reserve Currency Status on Debt Ceiling Standoff

Goldman Sachs Sees European Gas Prices Tripling, Gives Price Forecast in H2 2023

BofA Sharply Lowers Forecast for Oil Price, Global Oil Consumption in 2023

UBS Raises China GDP Growth Forecast, Sees Earnings from China Stock Market Soaring, RMB Appreciating

Global Aluminium Inventory to Plunge Further amid Supply Headwinds, LME Aluminium Prices to React Fast

Takeaways of Warren Buffett and Berkshire Hathaway’s 2023 Annual Meeting

High Lithium Ore Prices in Australia will Drive Lithium Prices Rebound, Reasons Prevent Output to Grow

Sharp Output Cuts Led to Lithium Ore Shortages, High Import Prices Drove Lithium Salt Producers to Shut Down

US Treasury Bill Rates Soar to Record High on Debt Ceiling Jitters

Russia is Accelerating Technology to Become Top Liquefied Natural Gas Supplier by Tripling Exports By 2030

No Other Country can Replace China's Manufacturing Industry Including India

Global Manufacturing PMI in April Points to Greater Downward Pressure on Global Economy

SMM Daily Comments (May 5): LME Base Metals Rose across the Board, SHFE Nickel Plunged

SMM Daily Comments (May 9): Most LME Base Metals Closed Lower, SHFE Nickel Prices Plunge, Ferrous Metals Mostly Rose

SMM Daily Comments (May 12): SHFE Base Metals and Silver Prices Crashed, Most LME Base Metals Prices Went Down, Oil Posted 3-Day Losing Streak

A Bull Gold Market Has Just Begun 

Fitch Ratings Raises Saudi Arabia IDR, Says World Bank Reason and High Dependence on Oil Remain a Weakness for the Country's Rating

Copper Shortage Is Irreparable Even after Biggest Mergers and Acquisitions, Here’s Why

Buffett Talks about Banking Crisis and Bank Stocks He Bought, Munger Warned Commercial Real Estate: the City Will Be Seriously Hollowed Out