LME and SHFE Zinc Prices to Rise Despite No Obvious Sign of Improvement in Demand

Last Friday, the zinc price temporarily stopped falling and stabilised. The current zinc price has basically fallen to the cost line of 75% of total domestic capacity at mines. The willingness to sell in June at some of domestic mines began to decline, and they rejected increases in domestic zinc concentrate TCs in June.

The production of domestic refined zinc enterprises is relatively stable at present, but some enterprises are likely to carry out maintenance in advance. In addition, due to the recent rapid decline in zinc prices, most smelters held back goods. It is expected that the inventory of domestic smelters will increase in the near future.

On the demand side, downstream purchases were poor last week. It is expected that after the zinc price stabilises at a low level, downstream stocking will improve. There is no obvious sign of improvement in the short term.

We believe that prices rebounded as the price approached the cost line. The driving force for obvious improvement in fundamentals is insufficient.

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