Guangdong Zinc: Downstream sentiment is bearish, spot premiums/discounts continue to decline [SMM Midday Review]

SMM May 13 report:

       In Guangdong, the mainstream transactions for 0# zinc were concluded at RMB 22,505-22,715/mt. Mainstream brands were quoted at a premium of RMB 310/mt against the 2506 contract and at a discount of RMB 20/mt against spot aluminum in Shanghai. The Shanghai-Guangdong price spread widened. In the first period, suppliers quoted Qilin, Mengzi, and Lanxin zinc at a premium of RMB 320-350/mt. In the second period, Qilin, Mengzi, and Lanxin zinc were quoted at a premium of RMB 320-340/mt against the online price. Overall, spot premiums/discounts in Guangdong continued to decline today. Affected by the relatively high spot premiums/discounts, downstream buyers mainly made just-in-time procurement to consume their existing inventory. Meanwhile, some downstream buyers remained bearish on the future premiums and discounts, resulting in low purchase willingness. Additionally, the decline in the price spread between futures contracts today drove down the market premiums/discounts.