According to the monitoring of the commodity market analysis system of Shengyi Society, as of February 21, the price of 0 # zinc was 23690 yuan/ton, slightly higher than the zinc price of 24062 yuan/ton on February 17, with a growth rate of 1.57%.

This week’s market analysis

This week, zinc prices have shown a slight upward trend. The slow recovery on the demand side is expected to continue, and the current price lacks sufficient momentum, resulting in a lag in the actual progress of resuming production after the holiday.

Fundamentals

This week, the continuous increase in zinc ore processing fees has led to a decrease in zinc smelters’ purchases of zinc ore in February. Due to the high level of raw material inventory in zinc smelters, their demand for further procurement of zinc ore is not urgent. In this situation, zinc smelters have a strong desire to raise processing fees and hope to protect their profit margins by maintaining or increasing processing fees. The continuous increase in processing fees has put pressure on the supply side. On the one hand, the reduction of procurement by zinc smelters may lead to a relatively tight supply of zinc ore in the market, which in turn may have an impact on the production and supply of zinc; On the other hand, the presence of high price sentiment may also make smelters more cautious in raw material procurement, further limiting the supply of zinc.

Demand side

Although the operating load of galvanized and die cast zinc has significantly increased compared to the previous period, due to the slow resumption of production by downstream enterprises, domestic social inventory continues to increase, and the turning point for destocking is later than previously expected. Galvanized and die cast zinc, as the main consumption areas of zinc, should have driven an increase in demand for zinc due to the rebound in operating load, thereby reducing social inventory. However, the actual situation is that downstream enterprises have a slow pace of resuming production, which directly leads to a slower than expected recovery on the demand side. Therefore, although the operating load on the production side has increased, the demand side has not kept up in a timely manner, resulting in the accumulation of domestic social inventory.

comprehensive analysis

It is expected that the zinc price will fluctuate within the range in the short term, with limited upward and downward space.