[SMM Analysis] Analysis of the causes of the sharp decline in the arrival of zinc ingots in Guangdong in April

SMM4, March 30: in April, the storage volume of zinc ingots in Guangdong market remained in the doldrums, both year-on-year and month-on-month. We believe that there are the following reasons for the decline in the volume of goods received:

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In January and April, the spot price of Guangdong zinc ingot was much narrower than that of the futures contract in the same month, and once turned to a rising water state, and the demand for smelter delivery to Guangdong delivery warehouse for futures delivery was obviously weakened.

2. After the freeway is free of charge, in order to reduce the cost and increase the income, the quantity of goods transported directly downstream by automobile transportation increases after the traders pick up the goods in the smelter area, resulting in the decrease of the storage volume of the warehouse.

3. The price difference between the spot price of zinc ingots in Guangdong and East China was once enlarged to about 150 yuan. The smelter changed the delivery plan, and the volume of goods sent to East China increased significantly, which correspondingly reduced the shipment to Guangdong.

4. The volume of goods purchased by enterprises in Fujian, Hunan and other places has increased, and some of the sources of goods have been taken directly from smelters to factories to divert the supply of goods from the Guangdong market.

At present, the transaction price difference of zinc ingots between Guangdong and East China is still 100 yuan, the smelter has a better profit in East China, and at the same time, the market liquidity in East China is stronger, which has also prompted smelters to reduce shipments in Guangdong. We believe that the arrival of goods in the short-term Guangdong market is still difficult to increase significantly.

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