Overseas macroeconomic data showed resilience and expectations of a rate cut by the Federal Reserve were depressed again. Market optimism faded, and ferrous metals prices continued to fall, dragging zinc prices down. From a fundamental point of view, the contango of LME 0-3 has expanded to about $45/mt, and the LME zinc inventory has once again exceeded 270,000 mt. Spot consumption is still poor; the domestic ore shortage situation continues, and zinc concentrate TCs fell further, which drove more smelters to cut production for maintenance. Refined zinc output will continue to be low from March to April, and the supply shortage will still support zinc prices; domestic downstream consumption performed weakly in March, while the inflow of zinc ingots was replenished. Despite buying on dips, the inventory destocking was less than expected. If there is a large amount of destocking this week, there is still room for zinc prices to rebound; If inventory declines are limited, bulls’ confidence may be suppressed. If consumption still does not improve, zinc prices will continue to be weak, and the price will fluctuate in a wide range.
The SHFE 2405 zinc contract prices are expected to move between 20,700-21,500 yuan/mt.
LME zinc is expected to trade between $2,370-2,570/mt.
Spot discounts in Shanghai against the SHFE 2404 zinc contract are expected to move between 60-0 yuan/mt.
