Price trend

According to the monitoring of SunSirs Commodity Market Analysis System: As of August 29, the price of 0# zinc was 22,002 RMB/ton, down 1.35% from the zinc price of 22,302 RMB/ton on August 25.

Analysis review

At the start of the week, the Shanghai zinc market continued its volatile performance from last week’s previous week. Due to relatively loose domestic supply, Shanghai zinc prices came under downward pressure. Subsequently, despite continued increases in domestic social inventories, overseas zinc inventories continued to decline. Furthermore, recent signs of recovery in consumption in some downstream sectors in China contributed to continued volatility in Shanghai zinc prices. Afterwards, affected by the foreign market, Shanghai zinc opened higher. However, with domestic and international inventories diverging (domestic inventory increases and overseas inventories decreasing), Shanghai zinc prices once again entered a period of volatility. Subsequently, international prices continued to decline due to factors such as the better-than-expected August Conference Board Consumer Confidence Index in the United States and tariff disruptions, affected by this, Shanghai zinc opened lower.

Although domestic inventories continued to increase, trading conditions in the spot market improved, and coupled with a gradual decline in overseas inventories, Shanghai zinc ultimately maintained a volatile trend.

Supply and Demand

At the beginning of the week, zinc futures prices were high and volatile. During this period, market enthusiasm for taking delivery of rising prices was low, resulting in a relatively cool atmosphere. Warehouse arrivals continued to increase, though most of this was warehouse receipts. In the spot market, the circulation of delivery brands remained stable, with quotes mostly fluctuating around cost. Merchants were not very willing to further lower prices to sell. Downstream companies took advantage of the low prices to enter the market, taking delivery, resulting in a slight improvement in the trading atmosphere. However, due to weak overall downstream orders, the market situation did not improve significantly as the weekend approached, even with a sharp drop in zinc futures prices.

Inventory

Compared to last week’s previous week, social inventories continued to rise. Specifically, inventory growth in Guangdong was particularly significant, with some increases also observed in Shanghai and Tianjin. In Guangdong, trade activity was relatively subdued, with most arrivals continuing to be used for delivery, resulting in relatively stable inventory growth. In Tianjin, affected by downstream production restrictions during the week, consumer demand was weak, leading to a general accumulation of inventories. In Shanghai, due to normal arrivals during the week and weak downstream demand, inventories saw a slight accumulation. Considering the resumption of smelter production, SunSirs expects Guangdong's arrivals to continue to see a slight increase next week.

Future outlook:

It is expected that zinc prices will continue to be under downward pressure and fluctuate.

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