In 2022, the zinc price will hit a new record and then fluctuate and consolidate
According to the data monitoring of the business community, on April 20, 2022, the zinc price hit a new cycle high of 28754 yuan/ton (note: the cycle refers to 2011-09-01 so far), but the high zinc price did not last long. After the zinc price briefly hit a new historical high, the zinc price fell rapidly, hit the bottom in July, and then the zinc price fluctuated and consolidated. In 2022, the high level support of zinc market will not last long, the supply and demand of zinc market will be weak, and the zinc price will fluctuate and consolidate. Looking back at the zinc market in 2022, the trend of zinc price mainly has three stages, which are obviously different, and the main reasons for the change of zinc price in each stage are also different.
The first stage: The crisis in Ukraine and Russia caused the zinc price to soar to a record high
| PVA 1788 (PVA BP17) |
The first stage is from January to April. The main factor affecting the zinc price in this stage is the crisis between Ukraine and Russia. During the Spring Festival goods preparation period, although the zinc price rose slightly, the rise continued to be insufficient. Since late February, the Ukrainian Russian crisis has intensified, leading to a decrease in Russian natural gas exports to Europe and intensifying European energy crisis concerns. European natural gas prices have skyrocketed, zinc smelting costs have increased, zinc supply is expected to decrease, and zinc prices have risen to a record high. Glencore’s published data shows that in the first quarter of 2022, Glencore’s zinc output will decline by 15% to 241500 tons, the output of zinc smelters will decline significantly, and the shortage of zinc supply will intensify.
Phase II: Outbreak of the epidemic followed by economic weakness, and the zinc price fell rapidly
The second stage is from late April to July, and the zinc price drops rapidly. From the highest level of 28,754 yuan/ton on April 20 to the lowest level of 22,376 yuan/ton in the year on July 17, a decline of 22.18%. The sudden outbreak of the epidemic in Shanghai, coupled with the intensification of economic weakness, depressed demand in the zinc market and a rapid fall in zinc prices.
According to the statistics of the China Association of Automobile Manufacturers (see the figure below), in April 2022, the production and sales of automobiles will reach 1.205 million and 1.181 million respectively, with a year-on-year decrease of 46.2% and 47.1%, 46.1% and 47.6%; In April, the production and sales of automobiles decreased significantly, with the sales volume falling below 1.2 million, a monthly low in the same period in the past decade. The production and sales of the automobile industry fell sharply, the demand for galvanized sheet fell, and the demand for zinc fell seriously.
Influenced by the outbreak of the epidemic in Shanghai, the prevention and control of the epidemic was strengthened in April, and the number of enterprises cut production and stopped production increased; In addition, due to the difficulties in logistics and transportation, the sales of finished products are not smooth, the inventory is seriously overstocked, and the manufacturing industry is in recession. From the manufacturing purchasing manager index (PMI) released by the National Bureau of Statistics, it can be seen that the PMI index has fallen back, the domestic economic prosperity level has declined, the manufacturing prosperity level has declined significantly in April, the demand for nonferrous metals is weak, and the demand for zinc is weak.
According to the data released by the National Bureau of Statistics, China’s zinc output in June was 549000 tons, a year-on-year decrease of 4.2%. Zinc output 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, China’s imports of refined zinc in June 2022 were about 2391 tons. In June 2022, the imports of refined zinc fell 26.36% month on month, down 93.62% year on year. From January to June, the cumulative import of refined zinc was 49002 tons, down 81.78% year on year. It can be seen from the domestic zinc output and refined zinc import data that the domestic zinc supply declined in the first half of the year. The decrease in supply supported the rise of the zinc market, and the zinc price stopped falling and rebounded.
The third stage: many empty spaces intertwined, zinc price fluctuated and consolidated
The third stage is from August to December, during which the zinc price fluctuated and consolidated. As of December 15, the zinc price was 24758 yuan/ton, 1.04% higher than the zinc price on August 1. The price of zinc is relatively stable due to the interweaving of many and empty spaces.
| POLYVINYL ALCOHOL |
It can be seen from the trend chart of zinc concentrate processing fees that the domestic zinc concentrate processing fees continued to rise in the second half of the year, and the enthusiasm of zinc smelters increased. At the end of the year, many enterprises had plans to catch up with production. The output of zinc smelters was expected to increase, and the supply of zinc in the city was sufficient.
Under the dual impact of the supply crunch and energy crisis caused by the Ukrainian Russian crisis, many European zinc smelters were forced to reduce production and stop production. The Auby Smelter owned by Nyrstar started to operate with about 50% capacity in the second quarter, and the Buder zinc smelting business in the Netherlands was shut down for maintenance since September. In November, Glencore Nordenham Smelter was closed. By the end of 2022, the closed zinc production capacity in Europe will reach nearly 600000 tons/year. European zinc smelters cut production and stopped production, reducing the supply of zinc in the market.
Corresponding to the zinc smelting in Europe, the demand for zinc plating in Europe has declined sharply. In the first half of 2022, German electroplating enterprises are faced with paying 20 times the power cost. After the standard electricity price is adopted in September, the power cost may still reach about 500000 euros per month. However, German electroplating enterprises are unable to pass on this impact to the automobile customers (customers in the automobile industry), and the losses lead to the decline of the enterprise’s start-up. It is expected that the output of galvanized sheet will fall to the lowest level since the fourth quarter of 2020; The die casting industry is also facing the pressure of weak construction industry, and the average operating rate of the industry is considered to be 20-30% lower than that in the first half of the year. Downstream construction fell, and the demand for zinc was weak.
In September, the central banks of the United States, Europe and Africa and other seven countries raised interest rates one after another. A series of radical policies intensified the market’s concern about the global economic outlook. The nonferrous metal sector fell in response, and the gold, silver and silver markets were not there. The nonferrous metal index fluctuated and consolidated from August to October, the zinc market was weak, and the zinc price was weak.
Future market forecast
According to the data analysts of the business community; In terms of demand, the Federal Reserve has slowed down the pace of interest rate increase, easing concerns about the economic recession in the international market, reducing the expectation of global economic weakness, and changing China’s prevention and control measures. The domestic economic recovery has accelerated or stimulated the global economy to recover, and zinc market demand is expected to recover. In terms of supply, the epidemic prevention and control measures have changed or improved the shortage of zinc ore labor force. The supply of zinc ore is expected to increase, and the processing cost of zinc concentrate continues to rise, stimulating zinc smelting enterprises to start work and increasing the supply of zinc in the city. To sum up, the supply and demand of the zinc market have both warmed up. In the short term, the low inventory of the zinc market combined with the Spring Festival stock, the zinc price has a strong upward momentum. It is expected that the zinc price will rise in a volatile manner in the short term; With the increase of zinc supply in the zinc market, the inventory of zinc ingots accumulates, and the downward pressure of zinc price increases. In the medium and long term, the zinc price is still at a historical high, “high places are too cold”. The long-term high support of zinc price is insufficient, and it is expected that the long-term zinc price will fluctuate and consolidate.
| http://www.polyvinylalcohols.com |