SunSirs: The Zinc Price Fluctuated Downward with a U-shaped Trend in June

Price trend

According to the Commodity Market Analysis System of SunSirs, as of June 30th, the zinc price was 22,486 RMB/ton, a decrease of 1.11% from the zinc price of 22,738 RMB/ton on June 1st. The zinc price first fell and then rebounded in June, showing a U-shaped trend.

Analysis review

At the beginning of the month, as imported zinc ore gradually arrived at the port, coupled with the gradual recovery and steady resumption of domestic mining production, the inventory of raw materials in refineries had risen, and zinc prices had fallen. In the middle of the month, downstream enterprises showed an increased willingness to purchase at low prices and replenish inventory. As a result, zinc prices experienced a slight rebound. However, the order situation in the terminal market had not shown significant improvement, and under the sustained effect of the off-season, companies generally held a pessimistic attitude towards the future trend of zinc prices. Therefore, after a brief rebound, the zinc price adjusted downwards again. At the end of the month, the macro sentiment was good, and the overall performance of non-ferrous metals was strong, leading to a rebound in zinc prices. But from a fundamental perspective, oversupply was difficult to change, zinc prices lacked upward driving force, and there was great upward pressure.

In terms of raw materials

In June, mines in northern China basically resumed work and production. The production of domestic zinc concentrate continued to increase. Although the window for importing zinc concentrate in June had closed, goods with previously locked prices continued to flow into the market. It is expected that the supply of domestic zinc concentrate will remain relatively loose in June, and the processing fees for zinc concentrate will continue to rise.

Supply and demand side

On the supply side, the replenishment of imported ore in June and the gradual release of domestic mining production drove the continuous increase in processing fees. With sufficient supply of raw materials, the production enthusiasm of smelters was high. On the demand side, zinc consumption was still in the off-season stage, but the continued implementation of the "trade in" policy in China is expected to have a certain boosting effect on consumption.

Market outlook

Although there has been a significant increase in the domestic zinc production plan for June, based on the actual weekly production data, it may be difficult to achieve the expected level. It is expected that zinc prices will pull back slightly in the short term, but it is cautious to chase long.

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