The current bearish sentiment on the fundamentals of zinc has not changed. The market is currently focusing on sulphuric acid inventory expansion at zinc smelters. But SMM learned that very few smelters reported sulphuric acid inventory expansion. In addition, there were not many smelters suffering loses from sulphuric acid, so the probability of sulphuric acid inventory expansion forcing smelters to reduce production is low in the near term.
The SHFE/LME zinc price ratio continued to rise last week, and some imported zinc flowed into China. This week, the impact of imported zinc on the market will further increase and the domestic supply pressure will begin to increase. It is expected that the domestic spot premiums will continue to rise this week and may peak in the short term.
The market is currently bearish over domestic zinc prices. It is also necessary to be vigilant against the rapid rebound of zinc prices.
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