Price Trend

According to the data monitoring of business associations, zinc prices rose first and then fell in September. Zinc prices shocked and adjusted, and overall zinc market shocks remained stable. As of September 24, the price of zinc was 19113.33 yuan/ton, up 0.46% from 19026.67 yuan/ton at the beginning of the month, down 2.37% from 19576.67 yuan/ton on September 16, and down 15.59% from the same period last year.

II. Market Trend Analysis

Zinc processing fee

Name, Quote, Intermediate Value, Time Unit
Zinc concentrate TC/Guangxi 6500-6700 6600 0 2019-9-16 yuan/ton
Zinc concentrate TC/Hunan 6500-6600 6550 0 2019-9-16 yuan/ton
Zinc concentrate TC/Yunnan 6100-6600 6350 0 2019-9-16 yuan/ton
Zinc concentrate TC/Shaanxi 6500-6700 6600 0 2019-9-16 yuan/ton
Zinc concentrate TC/Inner Mongolia 6550-6750 6650 0 2019-9-16 yuan/ton
Imported zinc concentrate TC 260-300 280 0 0 2019-9-16 USD/DT for zinc 50
Zinc concentrate TC/Guangxi 6500-6700 6600 0 2019-9-23 yuan/ton
Zinc concentrate TC/Hunan 6500-6600 6550 0 2019-9-23 yuan/metal ton
Zinc concentrate TC/Yunnan 6100-6600 6350 0 2019-9-23 yuan/ton
Zinc concentrate TC/Shaanxi 6500-6700 6600 0 2019-9-23 yuan/metal ton
Zinc concentrate TC/Inner Mongolia 6550-6750 6650 0 2019-9-23 yuan/metal ton
Imported zinc concentrate TC 260-300 280 0 0 2019-9-23 USD/dry ton

From the table above, it can be seen that the processing cost of domestic zinc concentrate is about 6500-6700 yuan per ton of metal, while that of imported zinc concentrate is about 280 dollars per ton, which is much higher than that of previous years. Compared with zinc price, zinc processing fee accounts for more than 30%, and zinc ingot cost remains high. High processing fee limits the falling space of zinc price, and there is limited space for zinc price to fall after the market.

Domestic Zinc Production

From the figure, we can see that the output of zinc rose sharply in August, the effect of increasing domestic zinc production in 2019 was obvious, the output of zinc increased by 18.9% in August compared with the same period last year; from January to August, domestic zinc production increased by 8.2%, zinc production increased, supply of zinc increased, pressure of falling zinc price increased.

Downstream demand

According to the data of the National Bureau of Statistics, the construction area of real estate increased steadily in 2019, and the construction area of real estate increased by 8.8% in January-August. The growth of real estate construction area shows that the fixed demand of the real estate market has increased. At the same time, we can see from the chart below that in 2019, the new construction area of real estate decreased year-on-year, and the real estate industry declined compared with 2018. Overall, the demand of real estate for zinc has increased, but the benefits are limited.

3. Prospects for the Future Market

Bai Jiaxin, an analyst with business associations, believes that the processing fee of zinc concentrate remains high, the cost of zinc ingots is high, and the zinc market has limited space to fall; the output of domestic zinc ingots has risen sharply in 2019, and the supply of zinc in the market is increasing, which has a negative impact on the price of zinc, and the pressure on the price of zinc has been greater; on the demand side, the real estate has risen overall, but it still falls Market demand is generally negative. In summary, the supply of zinc is in excess of demand, and there is downward pressure in zinc market. However, due to the high processing cost of zinc, the cost of zinc ingots is too high, and the space for zinc price to fall is limited. Zinc market in the future is mixed. It is expected that zinc prices will continue to oscillate in the future, and zinc prices will be adjusted.