First, the price trend According to business data monitoring shows: Under the influence of the international economic environment, the domestic zinc price shock fell after May. As at May 19, the price of zinc 21640.00 yuan/ton, compared with the beginning of this month zinc price 22133.33 yuan/ton fell, a decrease of 2.23%. Zinc prices rose 3.11% from the same period last year.
Overall May zinc market shock fell, zinc market bearish.
Second, the market trend analysis
LME Futures Market
Shanghai Futures Market
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As can be seen from the chart, May LME market Zinc ingot inventory surged, zinc ingot supply growth, dragging down the price of zinc market, zinc price fell sharply; Shanghai futures market Zinc ingot inventory has dropped significantly, the price of zinc has a certain positive impact, but the global market zinc supply is still growing state, the zinc market formed a bearish.
International Enterprises: Statistics show that Lundin Company produced 40446 tons of zinc concentrate in the first quarter, an increase of 10% year-on-week, exceeding the company’s expected output.
Zinc concentrate production growth exceeded expectations, zinc market supply increased, zinc city to maintain an oversupply, zinc city to form a greater bearish.
Data statistics: The international lead and Zinc research Group (ILZSG) said in Thursday that global demand for refined zinc was expected to be over supply in 2019 and that there would be a shortage of 121,000 tonnes in the market. ILZSG said the demand for refined zinc in 2019 was estimated to increase by 0.6% to 13.77 million tonnes and had remained stable over the past four years. Zinc market expected to rise on the price of zinc has a certain positive.
But the benefits are limited and it is difficult to form long-term support for zinc prices. Data from the Ministry of Information and Statistics show that in the first quarter of 2019, China’s zinc production of 1.31 million tons, an increase of 5.1%. The decrease of zinc production in China has certain benefits to the domestic zinc market.
But the global zinc market oversupply situation, the domestic zinc market is difficult to have a better performance.
Sino-US Trade war: May 9–The U.S. government announced that the tariff rate on the 200 billion dollar list of goods imported from China has increased from 10% to 25% since May 10. May 13, China’s State Council tariff committee issued a notice that from 0 o’clock on the June 1, will be imposed tariffs on the 60 billion of dollars list of United States goods, the increase in tariff rates, respectively, the implementation of 25%, 20% or 10% of the levy tariff. 5% tariffs continue to be imposed on items that have previously been imposed on tariff lines of 5%.
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Sino-US trade disputes escalated, the macroeconomic environment deteriorated, the non-ferrous metal market became negative, zinc demand bearish, zinc prices rose powerless.
Trump delays imposing tariffs on cars U.S. President Donald Trump is expected to delay the decision to impose tariffs on imported cars and parts for six months to temporarily avoid expanding global trade disputes, foreign media four reported. Trump’s delay in imposing tariffs on cars comes at a time when the United States is trying to reach a potential trade deal with China to end escalating conflict. The suspension of the imposition of tariffs on cars in the United States has created a greater boon for the auto market.
With global car sales continuing to decline, tariff policies will only ensure that demand for zinc in the car market does not decline significantly, making it difficult to guarantee higher demand for zinc.
Third, the outlook of the aftermarket Business analyst Baijia said: From the inventory data can be seen, the global supply of zinc market has risen sharply, zinc city is still in an oversupply state, although there is a forecast of 2019 zinc market demand rise, but small demand rise is difficult to form an effective support for the continued rise in zinc prices. The escalation of the Sino-US trade war has worsened the macroeconomic environment and led to the deterioration of the zinc market, although the United States has delayed its policy of tariff increases on the European Union and Japan in order to ease global trade disputes, but today, as the global car continues to decline, tariff policies have only slowed the decline in car sales, and demand for zinc has not increased. The positive for zinc market is limited. Overall zinc market is greater than good, after the price of zinc rose weak. Expected after the market zinc price shock fell.