Mid-week recovery in transactions fails to offset increased market supply; spot premiums/discounts in Guangdong maintain fluctuating trend this week [SMM Guangdong Spot Weekly Review]

       This week, the premiums and discounts in Guangdong region decreased by around 5 yuan/mt WoW. As of this Friday, the mainstream 0# zinc quotations in the Guangdong region were at a discount of 90~40 yuan/mt against the market, with the Shanghai-Guangdong price spread widening. At the beginning of the week, the contract rollover in the Guangdong region saw the quoted contract change from the 2509 to the 2510 contract. Under the Contango structure and during the off-season for consumption, spot premiums and discounts continued to decline. Mid-week, the center of zinc prices moved downward, boosting downstream procurement enthusiasm, and traders' sales improved, leading to an increase in spot premiums and discounts. However, given the ample supply of spot goods in the Guangdong market and the relatively small drop in zinc prices, after end-users made just-in-time procurement, market transactions gradually weakened again. Currently, overall consumption in South China remains relatively weak, and inventories are at historically high levels. It is expected that spot premiums and discounts will continue to be in the doldrums.