SunSirs: Weakened Supply Met Poor Demand, Zinc Prices Fluctuated and Rose This Week

Zinc prices fluctuated and rose this week

According to the Commodity Market Analysis System of SunSirs, as of August 7th, the zinc price was 20,962 RMB/ton, a fluctuating increase of 2.04% compared to the price of 20,542 RMB/ton on July 30th. The maintenance of zinc smelting enterprises had increased, the processing cost of zinc concentrate had increased, and the metal zinc market was positive. This week, zinc prices fluctuated and increased.

Weakened Supply Expectation Met Less Than Expected Demand

This week, the domestic zinc concentrate processing fee had slightly increased, with Shaoguan region increasing by 100 yuan/metal ton to 5,350 yuan/metal ton, Chenzhou region increasing by 100 yuan/metal ton to 5,300 yuan/metal ton, Zhuzhou increasing by 300 yuan/metal ton to 5,600 yuan/metal ton, Hechi region increasing by 300 yuan/metal ton to 5,300 yuan/metal ton, and Kunming increasing by 100 yuan/metal ton to 5,200 yuan/metal ton. In July 2023, China's refined zinc production was 551,100 tons, a decrease of 14,000 tons or 0.26% compared to the previous month, a year-on-year increase of 15.79%, slightly exceeding the expected value. It is expected that the domestic refined zinc production will increase by 16,000 tons month on month to 552,700 tons in August 2023, and a year-on-year increase of 19.43%. The maintenance of zinc smelting enterprises had increased, and the expected growth of refined zinc supply had weakened.

Affected by the rainstorm in the north, the construction of infrastructure and other related projects was postponed, the orders of galvanized enterprises were weak, and the operating rate of enterprises was lower month on month. Die-casting enterprises were operating at a low level, while zinc oxide enterprises were also slightly lower in terms of production compared to the previous month. The production of galvanized steel plates in large domestic steel mills had increased month on month. Overall, domestic demand was relatively stable. However, due to the impact of rainstorm weather, the demand for zinc was less than expected.

Market outlook

According to data analysts from SunSirs, there was an increase in maintenance for zinc smelting enterprises, an increase in zinc concentrate processing fees, an expected decline in refined zinc production, and a weakening of zinc market supply; In terms of demand, due to the impact of typhoon weather, the demand growth in the zinc market was not as expected. Both supply and demand in the zinc market showed varying growth, but the growth was not as expected. Zinc prices fluctuated and rose, but their sustained support was limited. It is expected that zinc prices will fluctuate and consolidate at high levels in the future.

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