1. Zinc price trend

According to data monitoring by SunSirs, the zinc price trend in September adjusted in an'N' shape, and the overall zinc market fluctuated and declined. As of September 30, the average zinc price was RMB 19,723.33/ton, which was a decrease of RMB 20,590.00/ton on September 1 at the beginning of the month, with a monthly decrease of 4.21%.

2. China Manufacturing Purchasing Manager Index

According to data from the National Bureau of Statistics of China, in September, China’s Manufacturing Purchasing Managers’ Index (PMI) was 51.5%, an increase of 0.5 percentage points from the previous month. The manufacturing boom has rebounded. Both ends of the supply and demand rebounded simultaneously. New export orders in September The index and the import index were 50.8% and 50.4%, which were 1.7 and 1.4 percentage points higher than last month, respectively, and rose above the prosperity and decline line for the first time this year. The import and export index rose above the critical point, the international market demand rebounded partially, the import and export of the manufacturing industry further improved, domestic supply and demand rebounded simultaneously, the domestic economic environment rebounded, and the domestic zinc market supply and demand rose simultaneously, which is positive for the zinc market.

3. Domestic zinc ingot production

From the statistics of domestic zinc production, it can be seen that in August, domestic zinc production increased sharply from the previous month, and the zinc concentrate processing fee remained high in September. Domestic zinc concentrate processing enterprises have sufficient production power, and domestic zinc ingot supply is sufficient. The downward pressure on market conditions is greater.

4. Zinc import data

According to the latest customs data released by the General Administration of Customs, the import of refined zinc in August 2020 was 46,600 tons, a year-on-year decrease of 31.08% and an increase of 5.89% month-on-month. The total export of refined zinc was 16,600 tons, which is a net import of 45,030 tons in August 2020. From January to August 2020, the cumulative import was 313,400 tons, a year-on-year decrease of 29.13%. In August 2020, 410,700 physical tons of zinc concentrate were imported, an increase of 138,000 physical tons compared with July, an increase of 50.7%; an increase of 161,000 physical tons compared with August 2019, an increase of 64.7%. From January to August 2020, the total import volume was 2.713 million tons, a year-on-year increase of 749,000 physical tons, an increase of 38.1%. Imports have increased significantly, the supply of zinc in the domestic zinc market has increased, the oversupply of the zinc market has increased, and the downward pressure on the zinc market has increased.

5. Analysis

SunSirs analyst believes that September is the traditional production peak season, known as the'Gold September Silver October'. In September this year, the domestic economy continued to pick up, and the demand for zinc in the zinc market rose slowly. The demand for zinc concentrate is expected to increase. On the supply side, domestic zinc production has risen, zinc concentrate imports have increased significantly, and refined zinc imports have rebounded. The zinc market supply has increased significantly. The overall supply and demand of the zinc market have both recovered, and the zinc price has insufficient momentum. At the time of the US general election, the market’s risk aversion has increased, and the decline in stock and futures prices has dragged down the spot market. The continued rise of foreign epidemics has not improved significantly, affecting the resumption of production and work, and the expected decline in global economic recovery, affecting the zinc market. On the whole, the supply and demand of the domestic zinc market have both recovered. The international zinc market is under negative pressure, and the zinc market has insufficient upward momentum and under pressure. It is expected that zinc prices will fluctuate and fall in the future.

Related listed companies: Zhongjin Lingnan (000060), Chihong Zinc Germanium (600497).

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