SunSirs: Zinc Prices Fluctuated Slightly Upward Last Week (October 27-31)

Price trend:

According to the commodity market analysis system of SunSirs: As of October 31, the price of 0# zinc was 22,266 RMB/ton, an increase of 0.32% compared with the zinc price of 22,196 RMB/ton on October 27

Market Analysis

Zinc prices showed a volatile but slightly upward trend, supported by declining overseas inventories and supply shortages, while domestic demand remained relatively weak.

Raw Materials

As of October 31, domestic production remained at a high level, while the supporting effect of raw material costs was becoming increasingly apparent. Entering October, production schedules remained high, with smelter operating rates approaching 93.7%, reaching capacity utilization saturation. Against this backdrop, domestic TC prices haf fallen to 3,400 RMB/metal ton, while imported TC prices stabilized at 119 USD/dry ton. Although smelting profits were squeezed to some extent by rising raw material costs, overall profit levels remained relatively high.

Supply and Demand Side

Under the domestic economic environment, the overall consumer market was showing a weak trend, with insufficient growth momentum in domestic demand. While exports entered a window of opportunity, end-user demand remained weak, and market activity needed to be improved. After the holiday, the market mainly focused on digesting previously accumulated inventory, and the industry's operating rhythm was gradually recovering. Against this backdrop, the timely opening of the profit window for zinc ingot exports brought a positive signal to the domestic zinc ingot market, and is expected to effectively alleviate the pressure of oversupply in the domestic zinc ingot market, promoting a balance between supply and demand.

Inventory side

Domestic zinc ingot inventory had decreased.

Market outlook

The zinc market recently showed a short-term bullish trend, supported by several factors. From a supply and demand perspective, the market was in a tight balance, with limited growth on the supply side and relatively resilient demand, making it difficult to effectively alleviate the supply-demand imbalance in the short term. At the same time, the price difference between domestic and international zinc markets was gradually narrowing, indicating that domestic zinc prices were more competitive in the international market, further stimulating domestic demand. Furthermore, tight inventory levels were also a significant factor, providing strong support for zinc prices. Considering these factors, the zinc market exhibits significant structural support in the short term.

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