SunSirs: National Dumping of Reserves, China's Zinc Market Inventories Increase

According to the 2021 No. 2 Announcement of the State Bureau of Grain and Material Reserves, from July 5th to 6th, zinc bidders will openly bid for the first batch of 30,000 tons of national zinc reserves in 2021. Zinc national reserves were put into the market, the supply of zinc ingots increased, and zinc market inventories rose.

Social inventory of zinc ingots

In July, zinc ingot inventory in the main zinc market in the domestic zinc market fluctuated and increased. Affected by the state’s reserve dumping, zinc companies’ purchasing enthusiasm weakened, zinc concentrate processing fees rose, and zinc smelting companies started to increase enthusiasm. The supply of zinc ingots was sufficient and the social inventory of zinc ingots increased.

Shanghai futures market zinc ingot inventory

This week, zinc ingot inventories first decreased and then increased. The state dumping of reserves stimulated the decline in the purchasing enthusiasm of the zinc market. The transaction in the zinc market was cold, the destocking of the zinc market decreased, and the zinc ingot inventory increased slowly.

Zinc price rise slows down

This week, the price of zinc continued to fluctuate and rose in late June. As of July 9, the price of zinc was 22,676.67 yuan/ton, which was an increase of 3.55% compared with the zinc price of 23,133.33 yuan on June 21, and was 22530 yuan/ton on July 1. The ton fluctuated and rose by 0.65%, and the increase in zinc prices slowed down this week.

Shanghai futures market price trend

According to data released by the Shanghai futures market, zinc prices in this cycle rose first and then fell. Affected by the increase in zinc ingot inventories, the downward pressure on zinc prices in the future will increase. It is expected that zinc futures prices will fluctuate and fall in the future.

Outlook

Stimulated by the news of the national reserve dumping, the zinc market's rise slowed down. This week, the zinc dumping reserve was officially auctioned, and the zinc market supply increased, while the zinc downstream enterprises purchased national reserve zinc. The enthusiasm for purchasing zinc from the society declined. The overall zinc market supply increased. Downstream customers Purchasing enthusiasm weakened, zinc market inventories increased, spot zinc prices remained fluctuating, and futures zinc prices fluctuated and fell. In the future, the downward pressure on zinc ingot prices will increase, and zinc prices are expected to fall sharply in the short term.

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

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