SunSirs: Nonferrous Metals Zinc Production Rose, Market Had a Poor Performance

1. Prices Trend

According to the data monitoring of the SunSirs, zinc prices swung lower in November. On November 19, the price of zinc was 18,646.67RMB/ton, 2.76% lower than that of November 1 (19,176.67RMB/ton), and 15.70% lower than that of the time last year. Zinc prices fluctuated and adjusted within the range, and the range was much narrower than that of September. In November, Zinc market had a poor performance.

2. Market Analysis

Price trend of zinc in LME Market

Zinc prices in LME futures market swung lower in November. On November 18, LME zinc ingot quoted price was $2,383 per ton, compared with the zinc price of $2,540 per ton at the beginning of this month, zinc prices swung lower. The prices of zinc in LME market has swung lower, which was bad for the domestic zinc market. The domestic zinc price shas losed the upward momentum support, and the future zinc market will not good.

Price trend of zinc in Shanghai Futures Market

In November, zinc prices in Shanghai futures market swung lower, and in general, zinc market swung lower as well. On November 19, the quotation price of zinc ingot in Shanghai futures market was 18,375RMB/ton, slightly lower than the average price of 18,890RMB/ton at the beginning of this month. In November, the zinc prices of futures swung lower, which was bad for the domestic spot market, domestic zinc spot market downward pressure increased.

Domestic zinc production

Compared with 2018, the domestic zinc production in 2019 increased significantly year on year, and the zinc production kept a double-digit growth rate for four consecutive months., and maintained high growth for six consecutive months. Compared with 2017, the output of zinc ingot in 2019 has a slight increase. It can be seen that the sharp decline of zinc ingot production in 2018 caused by environmental inspection has been alleviated, the production of zinc ingot has returned to normal, and the production capacity of zinc ingot has recovered. The increase of zinc ingot supply has a negative effect on zinc market prices.

3. Prospects for the Future Market

According to an analyst of SunSirs, LME zinc prices swung lower in November. The international zinc market was not good, which was bad for the domestic zinc market. In the domestic zinc market, the trend of zinc price in Shanghai futures market swung lower, the futures market went down, which was bad for the spot market. With the continuous and substantial increase of zinc ingot output, the zinc market has changed from outstripped supply to oversupply, and the oversupply is increasing; in terms of demand, the demand of zinc market is cold, and there is no obvious positive stimulus. Generally speaking, the supply of zinc market increases month by month, the demand does not pick up significantly, the oversupply of zinc market aggravates, the futures market falls, which collapses the cost support of the spot zinc market, and the spot price of zinc market fluctuates and falls. At the same time, due to the cost pressure of zinc ingot, there is limited space for zinc ingot to fall, and it is expected that zinc price will fluctuate and fall slightly in the future.

Related lwasted companies: Nonfemet(000060), CHIHONG Zn&Ge(600497).

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