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SunSirs: Chinese Zinc Market before and after the Spring Festival
February 10 2021 10:02:59SunSirs(Linda)

Zinc price trend

According to SunSirs data monitoring, zinc prices have fluctuated and fallen sharply since January. Although zinc prices fluctuated slightly in February, the amplitude of zinc prices decreased, and the overall zinc market was weak and volatile. As of February 9th, the average zinc price was 20210.00 yuan/ton, a decrease of 5.22% from the zinc price of 21323.33 yuan/ton at the beginning of January.

China Manufacturing Purchasing Managers Index

According to data from the National Bureau of Statistics of China, in January, China's Manufacturing Purchasing Managers Index (PMI) was 51.3%, down 0.6% from the previous month. For 11 consecutive months above the critical point, China's economy has maintained an expansion trend, but the decline in the index indicates that the growth rate has slowed down. Around the Spring Festival is the traditional off-season of my country's manufacturing industry. In addition, the recent localized epidemic has had a certain impact on the production and operation of some enterprises, and the overall expansion of the manufacturing industry has slowed down. The zinc market's rising support remains, but the rising support weakened.

Zinc City Supply and Demand Quotes

On the demand side, during the Spring Festival, the zinc market is traditionally off-season, and the demand in the zinc market has weakened seasonally. Due to repeated epidemics, enhanced environmental protection measures in the heating season, and rising natural gas prices in North China, galvanized pipe and structural parts companies have stopped and reduced production. During the period, downstream customers increased their holidays, and market transactions were light. On the supply side, the output of smelters was maintained at a high level, and the zinc market was adequately supplied before the holiday. During the Spring Festival, the inventory pressure in the zinc market increased; zinc ore processing fees continued to decline, and the actual profit of the smelter declined. During the Spring Festival, domestic logistics stagnated and zinc ore inventory at ports There is a possibility that the library will continue to be exhausted. Before and after the Spring Festival, the risk of smelter shutdown for maintenance is relatively small; however, if the zinc concentrate processing fee continues to be low, or the smelter is forced to suspend production for maintenance, the risk of zinc smelter shutdown still exists. Generally speaking, the zinc market has strong supply and weak demand around the Spring Festival, and the zinc market's rise is insufficient.

Analysis, Overview and Outlook

SunSirs analysts believe that around the Spring Festival, the zinc market is the traditional off-season in the domestic market, and demand in the zinc market is weak; on the supply side, affected by the continuous decline in zinc concentrate processing fees, the risk of a decline in zinc market supply in the future is increasing. However, there is still a big risk of bargaining in the zinc market during the Spring Festival. During the Spring Festival, the output of smelters is low for maintenance and repairs. The situation of smelters in the future is to be determined. The supply of zinc in the zinc market is still sufficient. And the zinc market is off-season around the Spring Festival, and the demand for zinc is not enough to support zinc prices. Soaring, the zinc market mainly wait and see around the Spring Festival.

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

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