Zinc price trend
| PVA |
According to the data monitoring of business agency, the trend of zinc price in July can be divided into several stages: 1 July to 8 July shock and maintain stability; 9 July to 13 July the first wave of rapid rise; 14 July to 27 July shock adjustment stage; 27 July to 31 July again rapid rise stage. As of July 31, the average price of zinc was 18980.00 yuan / ton, up 11.12% from 17080.00 yuan / ton on July 1.
The retail scale of home appliances in the first half of the year reached 369 billion yuan
On July 27, the report on China’s home appliance market in the first half of 2020 released by the China Institute of electronic information industry development showed that the retail sales of China’s home appliance market in the first half of 2020 was 369 billion yuan, down 14.13% from the same period last year. In the second quarter, the total retail sales of China’s home appliance market reached 248.6 billion yuan, twice as much as that in the first quarter, with a year-on-year increase of 2.64%. Affected by the epidemic situation, domestic household appliances consumption fell sharply in the first quarter. With the resumption of work and production in the second quarter, consumption recovered and there was a certain amount of retaliatory consumption, which led to a year-on-year increase in household appliances consumption in the second quarter. It is expected that household appliances consumption will recover in the third quarter. As the main downstream of zinc ingot consumption, the zinc market demand is expected to maintain stability, and the positive effect on the zinc market is weakened.
Domestic zinc production
Date output of the month (10000 tons) cumulative output (10000 tons) year on year increase (%) cumulative growth (%)
June 2020 52.304.8 1.2 7.7
May 2020: 51.4 252.7 4.5 9.1
April 2020 51.7 201.3 7.3 10.7
March 2020 48.9 149.5 4.7 11
February 2020 — 104 — 12.9
It can be seen from the table that the output of zinc ingots in the first half of the year increased year on year, but the increase slowed down month by month. The supply growth of zinc market slowed down significantly, the risk of excess supply decreased, and the risk of supply shortage increased.
Zinc inventory in Shanghai market
Time this week inventory increase / decrease
Subtotal futures
June 29 – July 3 95809 37146 – 1896 – 104
July 6 – July 10 91307 36696 – 4502 – 450
July 13 – July 17 93637 38895 2330 2199
July 20 – July 24 89188 37285 – 4449 – 1610
July 27 – July 31 88347 35631 – 841 – 1654
It can be seen from the table that the zinc ingot inventory in Shanghai futures exchange market decreased slowly in July, the futures inventory also decreased slightly, and the domestic zinc market supply decreased. With the recovery of domestic economy, the demand for zinc ingot is gradually increasing, and the shortage pressure of zinc market is increasing.
Zinc inventory in LME Market
Time stock (ton) change (ton)
July 1 122550 – 25
July 2 122525 – 25
July 3 122525 0
July 6 122275 – 250
July 7 122150 – 125
July 8 121950 – 200
July 9 121775 – 175
July 10 123375 1600
13 July 123475 100
14 July 123200 – 275
July 15 122975 – 225
July 16 122525 – 450
July 17 122400 – 125
July 20 121700 – 700
21 July 121050 – 650
22 July 133450 12400
July 23 150050 16600
July 24 154500 4450
27 July 158825 4325
July 28 173000 14175
July 29 187475 14475
July 30 188175 700
It can be seen from the table that the zinc ingot warehouse in LME market has a small fluctuation and drop in the first and middle of July. Affected by the epidemic situation, zinc ore production is more stopped, the supply of zinc market is reduced, and the zinc ingot inventory is reduced. However, since late July, the inventory of zinc market has increased sharply, and the pressure of excess supply in zinc market has increased. Affected by the epidemic situation, the global economy is weak seriously, and the economic recovery in the second half of the year is not ideal, and the demand for zinc is bad. After the market zinc ingot supply surplus risk surge.
China Manufacturing Purchasing Manager Index
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According to the data released by the National Bureau of statistics, in July, the purchasing manager index (PMI) of China’s manufacturing industry was 51.1%, up 0.2 percentage points from the previous month, which was above the critical point for five consecutive months. China’s economic prosperity continued to recover, and the operating conditions of enterprises continued to improve. The improvement of macroeconomic environment is good for the zinc market, which has a certain upward momentum.
Zinc concentrate processing fee
Name: Rise and fall time of average quotation (yuan / ton)
ZN50 domestic zinc concentrate TC / Guangxi 5000-5200 5100 00 June 29
ZN50 domestic zinc concentrate TC / Hunan 5100-5200 5150 0 June 29
ZN50 domestic zinc concentrate TC / Yunnan 4800-5100 4950 0 June 29
ZN50 domestic zinc concentrate TC / Shaanxi 4800-5000 4900 0 June 29
ZN50 domestic zinc concentrate TC / Inner Mongolia 5000-5200 5100 00 June 29
ZN50 domestic zinc concentrate TC / Guangxi 5200-5400 5300 200 July 6
ZN50 domestic zinc concentrate TC / Hunan 5400-5500 5450 300 July 6
ZN50 domestic zinc concentrate TC / Yunnan 4800-5100 4950 0 July 6
ZN50 domestic zinc concentrate TC / Shaanxi 4900-5100 5000 100 July 6
ZN50 domestic zinc concentrate TC / Inner Mongolia 5200-5400 5300 200 July 6
ZN50 domestic zinc concentrate TC / Guangxi 5200-5400 5300 0 July 13
ZN50 domestic zinc concentrate TC / Hunan 5400-5500 5450 00 July 13
ZN50 domestic zinc concentrate TC / Yunnan 4900-5100 5000 50 July 13
ZN50 domestic zinc concentrate TC / Shaanxi 4900-5100 5000 0 July 13
ZN50 domestic zinc concentrate TC / Inner Mongolia 5200-5400 5300 0 July 13
ZN50 domestic zinc concentrate TC / Guangxi 5200-5400 5300 0 July 20
ZN50 domestic zinc concentrate TC / Hunan 5400-5500 5450 00 July 20
ZN50 domestic zinc concentrate TC / Yunnan 4900-5100 5000 000 July 20
ZN50 domestic zinc concentrate TC / Shaanxi 4900-5100 5000 0 July 20
ZN50 domestic zinc concentrate TC / Inner Mongolia 5200-5400 5300 0 July 20
ZN50 domestic zinc concentrate TC / Guangxi 5400-5600 5500 200 July 27
ZN50 domestic zinc concentrate TC / Hunan 5400-5500 5450 00 July 27
ZN50 domestic zinc concentrate TC / Yunnan 4900-5100 5000 000 July 27
ZN50 domestic zinc concentrate TC / Shaanxi 5100-5300 5200 200 July 27
ZN50 domestic zinc concentrate TC / Inner Mongolia 5200-5400 5300 0 July 27
It can be seen from the data in the table that the domestic zinc concentrate processing fee rose sharply in July, ranging from 200-500 yuan / ton. The zinc concentrate processing fee rose and the zinc ingot cost rose, which was good for the zinc market, and the driving force for the rise of the zinc market was increased.
Analysis, review and Prospect
Bai Jiaxin, an analyst at the business agency, believes that since July, the processing cost of zinc concentrate has risen sharply, the impetus for zinc ingot rise has increased, the domestic economy has recovered, the demand for zinc market has recovered, the zinc price has been supported by the rise, and the domestic zinc market inventory has continued to decline slightly, which is the specific manifestation of the recovery of zinc market demand. However, we should pay more attention to the risk of zinc market while we pay attention to the rising power of zinc market. After the sharp rise of zinc market in July, the price of zinc is relatively high. However, the international market is affected by the epidemic situation, the risk of excess supply in zinc market is increasing, the inventory of LME market is soaring, and the risk of zinc market falling sharply. After the market zinc ingot falls the pressure to increase. Generally speaking, the good zinc market supported the ladder rise of zinc market in July, but the decline risk of zinc market in the future was greater. After the price of zinc should avoid chasing higher and be alert to the falling risk.
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