[SMM Analysis] Guangdong Zinc spot discount shows inverted V trend in the future or will continue the discount state in the future.

SMM4 month 10: Guangdong zinc ingot spot futures discount since mid-March futures delivery, continued to narrow, the futures contract for the next month to rise, but not for a long time, once again turned to the discount state, the overall trend was inverted V.

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In mid-March, the inventory of zinc ingots in Guangdong exceeded 100000 tons, a new high in recent years. The continuous rise in inventories has increased the pressure on the exporters of goods, and traders are also worried that with the end of delivery, the outflow of warehouse receipts will increase the supply of negotiable goods in the market, which will make short-term shipments more difficult, so it is basically dominated by active price adjustment, while downstream demand is stable, the market oversupply is obvious, and spot prices are under pressure. after futures delivery, the discount on spot to futures contracts for the current month was once expanded to around 100 yuan. However, with the decline in futures prices, downstream bargains to enter the market to increase demand, holders homeopathic prices, spot discount continues to narrow.

Under the influence of the expectation of tax reduction in the mainland, the holders of the futures contracts in the current month turned to rise and continued to expand, and under the influence of the expectation of tax reduction in the mainland, the holders relatively raised their prices, and some of the holders controlled the shipments. In addition to the general volume of goods delivered in the market, the source of negotiable goods in the market once decreased, and traders also purchased and prepared goods at bargain prices. Under the improvement of market trading, the quotation for the next month's contracts continued to rise, and the spot once turned to rise by 60 yuan / ton. However, the news of the tax reduction in the later stage has not yet been confirmed. The overall profit of the source of goods purchased at low prices in the early stage is better, the willingness to ship every rise in water has increased, and the supply of goods in the market has increased compared with the previous period. However, in the downstream, when orders have weakened and zinc prices have risen, procurement demand has dropped, and it is difficult to support market transaction prices. Traders have also given priority to receiving goods at low prices, and spot prices have begun to fall rapidly, once again turning into a discount state.

For the future Guangdong zinc ingot spot rising trend, we believe that unless the tax fall, otherwise the spot is still facing greater pressure, spot discount status will still be maintained: on the one hand, Guangdong inventory is still more than 90,000 tons, at a high level in recent years, will put pressure on the spot transaction price; on the other hand, affected by the decline of terminal export orders, Guangdong die-casting zinc alloy market demand dropped significantly in April, it is difficult to support the market transaction.

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