According to the Commodity Market Analysis System of Shengyi Society, as of June 30th, the zinc price was 22486 yuan/ton, a decrease of 1.11% from the zinc price of 22738 yuan/ton on June 1st. The zinc price first fell and then rebounded in June, showing a U-shaped trend.
At the beginning of the month, as imported zinc ore gradually arrived at the port, coupled with the gradual recovery and steady resumption of domestic mining production, the inventory of raw materials in refineries has risen, and zinc prices have fallen. In the middle of the month, downstream enterprises showed an increased willingness to purchase at low prices and replenish inventory. As a result, zinc prices experienced a slight rebound. However, the order situation in the terminal market has not shown significant improvement, and under the sustained effect of the off-season, companies generally hold a pessimistic attitude towards the future trend of zinc prices. Therefore, after a brief rebound, the zinc price adjusted downwards again. At the end of the month, the macro sentiment was good, and the overall performance of non-ferrous metals was strong, leading to a rebound in zinc prices. But from a fundamental perspective, oversupply is difficult to change, zinc prices lack upward driving force, and there is great upward pressure.
In terms of raw materials
In June, mines in northern China will basically resume work and production. The production of domestic zinc concentrate continues to increase. Although the window for importing zinc concentrate in June has closed, goods with previously locked prices will continue to flow into the market. It is expected that the supply of domestic zinc concentrate will remain relatively loose in June, and the processing fees for zinc concentrate will continue to rise.
Supply and demand side
On the supply side, the replenishment of imported ore in June and the gradual release of domestic mining production have driven the continuous increase in processing fees. With sufficient supply of raw materials, the production enthusiasm of smelters is high. On the demand side, zinc consumption is still in the off-season stage, but the continued implementation of the “trade in” policy in China is expected to have a certain boosting effect on consumption.
Future forecast
Although there has been a significant increase in the domestic zinc production plan for June, based on the actual weekly production data, it may be difficult to achieve the expected level. It is expected that zinc prices will experience a slight correction in the short term, but caution should be exercised when chasing long positions.