SunSirs: Demand is Weak and Zinc Prices Fluctuate in a Bearish Direction

https://www.chemnet.com   Aug 13,2024

Zinc prices fell first and then rose last week

According to the commodity market analysis system of SunSirs, as of August 9, the zinc price was 22,568 RMB/ton, a slight decrease of 0.97% from the zinc price of 22,788 RMB/ton on August 1.

Macro dynamics

The number of participants in the Federal Reserve's reverse repurchase tool has dropped to the lowest since June 2021, and the scale of use has dropped to the lowest since May 2021. The People's Bank of China has suspended its gold holdings for the third consecutive month, and its foreign reserves have remained at the 3.2 trillion US dollar mark for eight consecutive months. On August 2, the U.S. Department of Labor released the U.S. non-farm payrolls data for July, which unexpectedly cooled across the board, and the unemployment rate hit the critical value of Sam's Law. The risk of overseas recession has increased, and the market is risk-averse.

The zinc ingot inventory in the London LME futures market increased by 5,275 tons from last week

The data released by the London Metal Exchange (LME) showed that as of August 9, the inventory level of zinc in London was 239,925 tons, and the zinc ingot inventory in the London LME market decreased slightly, down 5,250 tons from the beginning of the month.

Market outlook

Last month, heavy rainfall and floods in many southern provinces forced mines in some areas to temporarily stop production. The maintenance work of domestic lead and zinc mines has also increased significantly. In August, the output of lead and zinc mines is expected to increase, mainly due to the increase in production resumption. At present, the raw ore of Huoshaoyun has not yet circulated to the market, and it is expected that there will be a flow result around September. The current zinc concentrate processing fee is at a historical low, and there is a possibility that subsequent refineries may temporarily reduce production or resume production less than expected. The overall supply of zinc alloys has decreased. Zinc alloy manufacturers have fewer new orders, and the downstream operating rate is not high. In the short term, zinc prices are bearish and volatile.

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