SMM Analysis: Price Difference of Spot Zinc Returns to Flat Premium, SMM Tells You the Reason

SHANGHAI, Oct. 13 (SMM)－According to SMM statistics, up to Sept.13^th, the price difference among Shanghai, Guangdong and Tianjin has returned to flat premium. Premium in Tianjin which has lasted for half year has rapidly shrank since Sept.1^st, approaching to premium of Shanghai Market. The price difference of Shanghai and Guangdong keeps flat premium of 50 yuan per tonne. SMM will analyze the reason of this phenomenon for you.

Notes; Yellow refers to price difference below Shanghai and Guangdong, blue refers to price difference below Shanghai and Tianjin.

Concerning the price difference between Shanghai and Tianjin, since Aug.18^th, price difference of 0# spot zinc in Tianjin Market against that in Shanghai Market has enlarged in step. Driven by supply side and consumption, premium of spot zinc keeps high. For Shanghai Market, with arrival of imported zinc, premium of domestic brand in Shanghai Market has been restrained. Plus Zhejiang being influenced by environmental protection, its consumption keeps weak. Premium of Shanghai market against Tianjin market also weakens.

Since September, overhaul of smelting plants in North China has finished. Circulating stock becomes more sufficient in market. With Tianjin being listed as the top five most heavily polluted cities, the zinc consumption of downstream has been restrained under the green policy. They are reluctant to purchase so Tianjin Market see a drop under pressure. While Shanghai market see a stable consumption with steady premium, which causes flat premiums between two markets.

Concerning Guangdong market, it seems not so changeable as Tianjin market. Die casting zinc alloys keeps stable consumption in Guangdong Market, with 50 yuan per tonne’s price difference against Shanghai for spot zinc.

SMM thinks currently see a stable consumption in Shanghai and Guangdong Market and price difference between two mearkets will remain current level. Tianjin Market will see a limited zinc consumption of downstream due to the 19^th CPC National Congress. Premium of Tianjin against Shanghai will probably see a small premium in the short term.

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