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SunSirs: Favorable Macro Policy Stimulus, China's Zinc Market Picks up
October 29 2020 08:36:05SunSirs(Linda)

1. Zinc price trend

According to data monitoring by SunSirs, since October 16, zinc prices have fluctuated upward, and the zinc market has fluctuated and recovered. As of October 28, the average zinc price was RMB 20,163.33/ton, an increase of 3.12% from the price of RMB 19,553.33/ton on October 16 at the beginning of the month.

2. The Fed extends quantitative easing policy measures

On October 9, Chicago Fed President Charles Evans said that if the economic recovery slows, the Fed will expand its quantitative easing (QE) efforts. In addition to Evans, many Fed officials have recently supported the expansion of QE and called for more fiscal policies. The quantitative easing policy is good for the macro economy and boosts future economic expectations. The zinc market is expected to pick up in the future.

3. The EU may increase easing policies

As the epidemic returns, many institutions expect the European Central Bank to maintain stability this week, but in view of the deteriorating economic outlook in the euro zone, Lagarde will release a signal to increase QE at the December meeting. The early fermentation of the European Bank’s easing expectations put pressure on the euro, and the euro may fall sharply. Loose monetary policy stimulates economic recovery, which is good for the zinc market.

4. Analysis, summary and outlook

SunSirs analysts believe that the United States and the European Union have successively launched stimulus policy signals to stimulate the market recovery, which is good for the zinc market. However, the epidemic in the European Union and other places has intensified in the past few weeks, resulting in new local blockade restrictions and the possibility of economic pressure again. Is rising. The macroeconomic environment is not ideal, and the zinc market will be under greater pressure in the future. It is expected that the zinc market will have limited growth momentum in the future. Generally speaking, the positive signs of macro policies have continued to stimulate the zinc market to pick up. However, the global economic environment has not performed well and the effect of policy stimulus is yet to be determined. The zinc price is expected to fluctuate slightly in the future.

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

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