Fundamentally, there is still no sign of improvement in the current demand which is still weak. Although zinc prices dropped sharply last week, downstream purchases have begun to weaken as most of the market participants stood on the sidelines. The market pessimism increased. Downstream plants maintained low operating rates and some companies reported that orders were subdued without noticeable improvement.
In terms of supply, Henan Yuguang Zinc Industry and Shaanxi Hanzhong Zinc Industry undertook maintenance in May. Other smelters have no maintenance plans. And domestic supply remains relatively high. In terms of imported zinc, with the further increase in the SHFE/LME zinc price ratio last Friday, import premiums for zinc ingots under warrants were lowered from $150/mt to $120/mt cif.
As the SHFE/LME zinc price ratio rises further, there will be more inflows of imported zinc.
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