Zinc prices trended lower last week. Domestic zinc concentrate TCs inched down with the mainstream traded TCs standing at 4,800 yuan/mt with metal content. With a profit of 500 yuan/mt, most smelters will not cut output in the near term. Secondary zinc smelters are currently operating with losses of 200-400 yuan/mt, but no enterprises have reduced production.
Due to the obvious weakening of domestic and overseas demand for sulphuric acid, inventories at smelters reached a record high. Sulphuric acid inventories have not ballooned yet, though. The demand for galvanising weakened, and there were no strong orders for die-casting and zinc oxide. SMM believes that the overall domestic demand is still weakening.
The performance of overseas demand has been poor, which is reflected in arriving shipments of zinc ingots. It is expected that overseas smelters will gradually resume production in the near term. Without positive fundamentals, zinc prices will lack support to rebound.
