SunSirs: Both Positive and Negative Factors Accounted for Half, Zinc Prices Rose in November in Shock

Zinc price rose in shock in November

According to the data monitoring of SunSirs, the zinc price was 24,434 RMB/ton as of November 30, up 5.60% from the price of 23,138 RMB/ton on November 1. In November, the bad news and good news in the zinc market were mixed, and the zinc price rose in shock.

Positive factors

From the trend chart of zinc ingot inventory in Shanghai futures market, it can be seen that the zinc ingot inventory in Shanghai futures market has fallen sharply since late October. In November, the zinc ingot inventory remained low, and the supply of zinc ingot was expected to decline. The zinc ingot had a strong upward momentum.

Glencore stopped its Nordenham zinc smelter for maintenance in Germany in November, and the scale of reduction and shutdown of European refineries was expanded to 740,000 tons. The reduction and shutdown of European refineries were further expanded, the supply of zinc in Europe was expected to decrease, and the driving force for the rise of zinc price was increased.

Due to environmental pollution in the waters of Sichuan, the Provincial Environmental Protection Department ordered some zinc smelters to stop production, resulting in limited output of relevant refineries. It is reported that the annual capacity of enterprises affected this time was 310,000 tons, and the domestic zinc market supply was reduced. With the completion of environmental protection inspection in Sichuan, zinc smelters that have stopped production for nearly two weeks were started, and the supply of zinc market was restored. The upward momentum of zinc market was weakened.

Negative factors

The processing cost of domestic zinc concentrate continued to rise, and the production enthusiasm of zinc smelters had risen. At the end of the year, many enterprises have plans to catch up with production. The output of zinc smelters was expected to increase in November, and the supply of zinc in the future market was sufficient.

It can be seen from the trend chart of monthly zinc ingot output that the zinc output in October was 595,000 tons, up year-on-year and month on month. The cumulative output from January to October was 5.58 million tons, up year-on-year. The output of zinc market rose, the supply of zinc was sufficient, and the zinc market was negative.

Radical interest rate hikes in major economies such as the United States and Europe triggered fears of economic recession. The demand for nonferrous metals was expected to decline, and zinc prices in London fell sharply.

LME currently does not prohibit the delivery of Russian metals, nor does it set a threshold for the Russian inventory. The supply of zinc ingots in the international market is stable, avoiding a serious shortage of zinc supply in the market.

The Indian Mining Federation sent a letter to the Ministry of Finance seeking to increase the import tax on zinc and other metals to stop the tide of imports, especially from China. India's supply of zinc import tax affected China's export of zinc ingots, and the demand for zinc ingots was expected to decline.

Future market forecast

According to the data analysts of SunSirs; On the demand side, the global economic downturn is expected to intensify, the operating rates of zinc plating, die casting zinc alloy and zinc oxide are all down, the margin of terminal demand is weak, and the domestic epidemic situation is frequent, and the demand for zinc is expected to decline; On the supply side, the zinc concentrate processing fee continues to rise, and the zinc supply is expected to increase; The environmental protection inspection in Sichuan led to a decrease in the operating rate of Sichuan zinc ingot enterprises, the output of Glencore zinc smelting enterprises decreased, and the supply of zinc in the market decreased. To sum up, the supply of zinc was insufficient at the beginning of the month, and the price of zinc rose sharply. After that, the zinc price was shocked and consolidated. In the future, the supply of zinc is insufficient, the demand is declining, the zinc market is weakly consolidated, and the zinc price is expected to be adjusted in a wide range of shocks.

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