1. Zinc price trend

According to SunSirs data monitoring, zinc prices fluctuated and adjusted in October, and the zinc market was weak. As of October 21, the average zinc price was RMB 20,106.67/ton, an increase of RMB 19,723.33/ton from October 1 at the beginning of the month, an increase of 1.94%.

2. Reduced domestic and foreign zinc concentrate processing fees

According to statistics, in October, domestic zinc concentrate processing fees were 4,900-5,300 yuan/ton, a month-on-month decrease of 500 yuan/ton; imported zinc concentrate processing fees were US$100-120/ton, a month-on-month decrease of US$60/ton. To the lowest value during the year. The weather turns cold, there are signs of a second outbreak of overseas epidemics, and the willingness of zinc concentrate smelters to carry out winter storage in advance, the demand for zinc mines has increased, and the processing fees of zinc concentrate have dropped significantly, and there is still a risk of falling later. The decrease in zinc concentrate processing fees affects the supply of zinc in the domestic zinc market, and zinc prices have an upward momentum.

3. Zinc concentrate import data

According to the latest customs data released by the General Administration of Customs, in August 2020, 410,700 physical tons of zinc concentrate were imported, an increase of 138,000 physical tons from July, an increase of 50.7%; an increase of 161,000 physical tons, an increase of 64.7%, compared to August 2019. From January to August 2020, the total import volume was 2.713 million tons, an increase of 749,000 physical tons year-on-year, an increase of 38.1%. The sharp increase in zinc concentrate imports in August was in line with expectations, mainly because overseas mines further resumed work and production, and port shipments have gradually returned to normal. Overall, the inflow of imported zinc from overseas has increased significantly.

4. Domestic zinc market inventory

It can be seen from the zinc inventory data on the Shanghai futures market in October that zinc ingot inventories rose first and then fell. The domestic zinc market has substantially destocked, reflecting the good performance of domestic zinc market demand and the rebound of domestic zinc market.

5. Analysis, Overview and Outlook

SunSirs analysts believe that in October, zinc concentrate processing fees fell, zinc prices increased, and the volume of imported zinc concentrates increased. The domestic supply of zinc concentrates was sufficient and the zinc market lacked momentum. The domestic zinc market inventory has fallen, but the international zinc ingot inventory is sufficient, and the overall global zinc market is adequately supplied. The probability of foreign zinc ingot flowing into the country has increased, and the domestic zinc price rise is insufficient. Generally speaking, long and short factors coexist, and zinc prices fluctuate and adjust in the market outlook.

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

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