Zinc prices fluctuate and consolidate this week
According to the Commodity Market Analysis System of the Business Society, as of September 22, the zinc price was 22174 yuan/ton, a slight increase of 0.01% compared to the fluctuating zinc price of 22172 yuan/ton on September 15. The fundamentals are mixed, with limited fluctuations in zinc prices. The daily fluctuations in zinc prices have not exceeded 1%, and zinc prices have fluctuated and consolidated in a narrow range this week.
Zinc market fundamentals
The hawkish statement from the Federal Reserve boosted the US dollar index, with 10-year US Treasury yields hitting new highs. According to data from the US Department of Labor, the number of initial jobless claims in the week of September 16th decreased by 20000 after seasonal adjustments. The US labor market remains resilient, and the Federal Reserve has significantly raised its GDP growth forecast for 2023 and its GDP forecast for 2024. Macro positive, zinc market macro positive.
In terms of supply, the supply of zinc concentrate is relatively loose, and with high profits from smelters, the supply of zinc ingots increases. Coupled with the opening of the zinc ingot import window, the supply of zinc in the market increases; In terms of demand, the renovation of urban villages and the preparation of goods before the Double Festival have stimulated demand in the zinc market, and the consumption of infrastructure and home appliances has strengthened. However, real estate has dragged down consumption in the zinc market, and the actual effect of policy incentives has not been obvious. The accumulation of finished product warehouses has forced the operating rate of galvanized pipe enterprises to decline, and the growth rate of demand in the zinc market lags behind supply, making it difficult to reverse the trend of overcapacity. The overall zinc market is oversupplied, and there are still bearish prospects in the zinc market.
Future Market Forecast
According to data analysts from Business Society, the macroeconomic expectations of the international market have rebounded, and the positive support for the zinc market has increased. The domestic supply and demand expectations have both increased, but the supply growth rate is expected to be faster than the demand growth rate, resulting in an oversupply of zinc in the domestic market. Overall, the macro outlook is positive for both supply and demand, but the zinc market is oversupplied, making it difficult to determine the rise or fall of zinc prices. It is expected that zinc prices will consolidate in a narrow range in the future.