Zinc prices rose slightly this week

According to the data monitoring of the business agency, the zinc price rose slightly this week. As of July 26, the zinc price was 23154 yuan / ton, up 3.48% from 22376 yuan / ton on July 17 last weekend; Compared with the zinc price of 23246 yuan / ton on July 1, it fell by 0.40%. The zinc price rose slightly this week, the zinc market stopped falling and rebounded, and the conflict between the decline of zinc supply and the decline of zinc price eased. However, in July, the zinc price fell first and then rose. On the whole, the shock of zinc price in July stabilized, the conflict between the decline of zinc supply and the decline of zinc price still existed, and the zinc price entered the shock and pull stage.

The supply of zinc is still declining

Data released by the National Bureau of statistics on Thursday showed that China’s zinc production in June was 549000 tons, a year-on-year decrease of 4.2%. Zinc production from January to June totaled 3.263 million tons, down 1.7% year on year. According to the data released by the General Administration of Customs of China, the import volume of refined zinc in June 2022 was about 2391 tons. In June 2022, the import volume of refined zinc decreased by 26.36% month on month and 93.62% year-on-year. From January to June, the cumulative import of refined zinc was 49002 tons, with a cumulative year-on-year decrease of 81.78%. From the data of domestic zinc production and refined zinc import, it can be seen that the domestic zinc supply fell significantly in the first half of the year.

In the international market, under the supply contraction caused by the conflict between Russia and Ukraine, eurometalux, the European non ferrous metals industry association, warned that the zinc smelting capacity in Europe had fallen by nearly half in the past year, and now the price of electricity has further soared, which may lead to more factories shutting down in winter. Guy Thiran, director general of eurometaux, said that if the European Union’s concerns about natural gas shortages and soaring electricity prices in winter become a reality, more production facilities will face the risk of permanent closure. Under the dual pressure of the European energy crisis and the conflict between Russia and Ukraine, European zinc smelters have stopped production continuously, the resumption of production and resumption of work is far away, and the supply of zinc market has declined or existed for a long time.

Zinc market demand slowly warms up

In June, Shanghai announced the full resumption of work and production. The epidemic in Hebei, Beijing and other places intensified but the impact was controllable. At the same time, the government issued a series of economic recovery policies, including infrastructure, real estate, automobile and so on. However, the impact of the policy is less than expected, the performance of real end consumption is still weak, and the operating rate of enterprises is still low. Since July, more domestic stimulus policies have boosted the market, and the policy expectations for July have turned optimistic. The start-up of enterprises has warmed up, the processing fee of zinc concentrate has risen, and the enthusiasm of zinc smelting enterprises to start work has rebounded. However, the overall market demand has not changed much, and the stock has been removed to maintain the early level; The market terminal demand is unilateral, mainly long-term order circulation, and the stock removal is slow.

Aftermarket forecast

Business analysts believe that: the international market is affected by the energy crisis and the conflict between Russia and Ukraine, zinc smelting enterprises have been shut down continuously, and the supply of zinc has declined seriously; In the domestic market, affected by the epidemic, zinc production fell, and the overall supply of zinc fell. On the demand side, the macroeconomic performance is still weak, real estate, automobile and other industries are declining seriously, the demand of zinc city is low, domestic stimulus policies are slowly launched, and the consumption demand of zinc city is slowly warming up. In the future, the risk of long-term decline in zinc supply remains, and the demand side is expected to recover under the influence of stimulus policies, but whether the recovery in consumption can meet the expectations still needs time to test. The future zinc price trend still needs to pay attention to the demand side performance of the zinc market, focusing on the implementation of the policy and its impact on the demand of the zinc market. The future zinc price is supported by the rise, and there is a certain room for the rise of the short-term zinc price.