SunSirs: Putting National Reserves to Stabilize Zinc Price

The State Bureau of Grain and Material Reserves issued an announcement on the 16th that in accordance with the deployment of the State Council's executive meeting on ensuring the supply and price stability of bulk commodities, the State Bureau of Grain and Material Reserves will release copper, aluminum, zinc and other national reserves in batches in the near future. Affected by the news of the State Reserve Bureau’s dumping of reserves, non-ferrous metal futures fell across the board on the 16th. Shanghai nickel plunged 3.78%, international copper and Shanghai copper fell by more than 2%, Shanghai aluminum and Shanghai lead fell by more than 1%, and Shanghai tin and Shanghai zinc fell slightly. Fell. Selling reserves will benefit the non-ferrous downstream industries, and the zinc market has been spurred by the news to drop prices.

The risk of zinc price decline increases

According to the data monitoring of the business agency: zinc concentrate processing fees rebounded, superimposed on the weakening of the influence of Yunnan's power rationing, the output of zinc market is expected to rise, the supply of zinc is increased, the peak consumption season of zinc is about to pass, and the demand for zinc is expected to decline. Price consumption fluctuated and declined, and the fundamentals of the zinc market weakened.

Analysis

The zinc concentrate processing fee and the increase in the operating rate of enterprises will increase the supply of the zinc market, and the peak season of the zinc market will pass, the demand is expected to decline, and the zinc market lacks momentum to increase the downward pressure. At this stage, the national reserve releases news about the dumping of reserves, which further stimulated the decline in zinc prices. At the same time, the national reserve dumping has reduced the cost of domestic manufacturing enterprises, which is conducive to exports. Demand in the non-ferrous industry is expected to increase. Generally speaking, the price of zinc is stabilized by dumping reserves, the supply is slowly increasing, the demand is no longer strong, and the price of zinc is slowly falling.

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

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