The hottest Shanghai zinc should not catch up in t

Shanghai zinc should not catch up in the short term

due to the increase in domestic concentrate supply, the operating rate of zinc smelters is picking up, and the supply rate of zinc ingots will probably increase in the later period. Trade frictions between China and the United States still plagued the market, and the downstream consumption demand of zinc ingots was worrying. The rebound height of zinc prices in the future was limited

after mid July, the main contract price of Shanghai zinc stopped falling and rose rapidly, with an increase of 6.2% in just over 10 trading days. However, in view of the increasing supply of domestic zinc concentrate and weak downstream demand, this round of rapid rise in zinc prices cannot change its overall weak operating trend, and Shanghai zinc should not catch up in the short term

the supply of zinc concentrate is increasing

20 not only can protect the housing structure, the import volume of zinc concentrate in China from January to march of 2018 was 860000 tons, and the import volume of zinc concentrate in the same period last year was 702000 tons, an increase of 22%. The smelting fee (TC) of imported zinc concentrate also increased from $25/ton at the beginning of the year to $60/ton at present. The processing fee of domestic zinc concentrate is 3600-3700 yuan/ton, an increase of 100-200 yuan/ton over the beginning of the year

the increase in the processing fee of zinc concentrate will not increase the pressure, which also reflects that other physical properties can be achieved at present, and the domestic supply of zinc concentrate is sufficient. With the release of zinc ore supply, the profits of zinc smelting enterprises will continue to increase, the operating rate will rise, and the supply of zinc ingots will also increase in the later period

lme zinc ingot inventory increase

as of July 30, LME zinc inventory was 242050 tons, an increase of 61075 tons over the beginning of this year, an increase of 33.7%. According to the official data released by LME, on March 5 this year, the LME zinc ingot delivered 789500 tons in huge quantities, with a single day inventory increase of 59%, the largest single day increase since 1989. On April 25 and 26, LME zinc ingot inventory increased by 28150 tons and 18675 tons, with a total increase of 46825 tons in the two trading days. The large number of deliveries in the overseas market of zinc ingots implies that there are a large number of hidden inventories of zinc ingots in the market, and the supply pattern of zinc ingots, such as experiments on items with greater elasticity and longer length, is changing

domestic zinc ingot inventory is currently at a low level. As of July 27, the zinc ingot inventory in the previous period was 48135 tons, and the warehouse receipt inventory was only 8277 tons. The zinc ingot inventory of the Institute in the previous period is at a historical low. After the domestic 0# zinc spot entered July, the disk premium of that month also rose steadily, and the Zui reached 280 yuan/ton in mid July. After that, with the sharp rebound of Shanghai zinc price, the spot premium of zinc ingots fell back, and is now about 130 yuan/ton. As of the close of July 31, the position of Shanghai zinc 1808 contract was 38000, that is to say, the buyer and the Seller each held 19000, which is equivalent to that the seller needs to sell 95000 tons of zinc ingots. However, the zinc ingot inventory in the previous period was 48135 tons, and the registered Warehouse Receipt Inventory was only 8277 tons, which is quite different. It does not rule out the possibility of zinc ingots being pressed by many parties. However, due to the increase of domestic concentrate supply, the operating rate of zinc smelters is picking up, and the supply rate of zinc ingots will probably increase in the later stage, and the rebound height of zinc price in the future is limited

the downstream demand of zinc ingot is worrying

the large demand of Zui downstream of zinc ingot is galvanized sheet. From January to May this year, the cumulative output of galvanized sheet of key enterprises was 9.8 million tons, a decrease of 5.1% over the same period last year. This year, the environmental protection policy is still stricter. At the end of May, the central supervision team launched the "look back" of environmental protection, and many zinc plating plants that failed to meet the environmental protection standards stopped production, resulting in the weakening demand for zinc ingots. With the heating season approaching in the second half of the year, it is expected that the environmental protection policy will still be strictly implemented, and the demand for zinc ingots may be restrained. This year, China's economic growth has declined, and the completion of fixed asset investment has decreased by 2.6% compared with the same period last year. Sino US trade friction still plagues the market, and the downstream consumption demand of zinc ingots is worrying

to sum up, the supply of zinc ingots increases, the demand weakens, and the rebound of zinc price may be limited. It is suggested that an appropriate amount of short selling can be carried out when the zinc price rebounds to a high level