Guangdong Zinc: Downstream Procurement Demand Weakens, Market Transactions Deteriorate [SMM Midday Review]

SMM, March 4: Guangdong 0# zinc was mainly traded at 23,605-23,810 yuan/mt, with mainstream brands quoted at a discount of 10 yuan/mt against the 2504 contract and on par with Shanghai spot. The Shanghai-Guangdong price spread narrowed. In the first session, suppliers quoted Qilin, Mengzi, Feilong, and Lan zinc at a discount of 10 yuan/mt to a premium of 10 yuan/mt. In the second session, Qilin, Mengzi, and Lan zinc were quoted at a discount of 20 yuan/mt to a premium of 10 yuan/mt against the online price. Overall, the futures market declined today. Although the overall price difference compared to yesterday was relatively small, downstream inventory buildup from previous low-price purchases, combined with no significant improvement in end-use consumption, led to inventory accumulation for some enterprises. Procurement demand weakened, and market transactions deteriorated. If zinc prices continue to rise while downstream demand does not improve, premiums and discounts are expected to weaken.