Weak supply and demand, zinc prices fluctuated and fell in January

Zinc prices fluctuated and fell in January


According to the Commodity Market Analysis System of Shengyishe, as of January 31st, the price of zinc was 21250 yuan/ton, a decrease of 1.57% from the zinc price of 21588 yuan/ton on January 1st. As the Spring Festival approaches, both supply and demand are weak, and zinc prices fluctuated and fell in January.


Manufacturing Purchasing Managers Index rebounded in January


According to data released by the National Bureau of Statistics of China, the Purchasing Managers Index (PMI) of the manufacturing industry in January was 49.2%, an increase of 0.2 percentage points from the previous month. The domestic manufacturing industry has rebounded, and the expansion of the production index has accelerated, but overall it is still in a contraction range. The lack of macroeconomic benefits is generally bearish for the zinc market.


The processing cost of zinc concentrate has decreased


From the trend chart of zinc concentrate processing fees, it can be seen that the zinc concentrate processing fees continued to decline in January, with a slight decrease. As the Spring Festival approaches, smelters are still in the stage of reserving raw materials in the first quarter, and their procurement is relatively active. The tight mining situation provides cost support for zinc prices. The profits of smelters are in an inverted state, and some smelters have experienced maintenance and production reduction. Expected decrease in zinc supply in the market.


Zinc concentrate port inventory decline


From the statistical chart of zinc concentrate port inventory, it can be seen that in January, zinc concentrate inventory decreased, zinc concentrate supply decreased, and zinc market supply tightened, providing some positive support for zinc prices.


Domestic zinc ingot social inventory fluctuates and rises


From the domestic zinc ingot inventory statistics chart, it can be seen that zinc ingot inventory fluctuated and increased in January. As the Spring Festival approached, downstream enterprises stocked up, and zinc ingot inventory briefly declined. However, overall zinc ingot inventory increased, and downstream demand was poor, resulting in a clear negative impact on zinc prices.


Decreased demand


As the year-end approaches, downstream sectors have gradually entered a holiday period. Last week, the operating rate of galvanized sectors declined significantly, with a weekly operating rate decrease of 2.76%; Most die-casting zinc alloy companies will start reducing production lines and taking maintenance breaks in late January; Last week, the orders of various downstream sectors in the zinc oxide sector increased and decreased, and the overall operating rate remained weak. This week, as zinc oxide enterprises continued to holiday, the operating rate of enterprises continued to decline. As the Spring Festival approaches, downstream production has significantly declined, downstream consumption is weak, and zinc prices are bearish.


Future Market Forecast


According to data analysts from Business Society, the supply and demand of zinc in China were weak in January, and downstream customers stopped production for maintenance more. The supply of zinc in the market was relatively sufficient. Overall, the supply of zinc exceeded the demand, and zinc prices fluctuated and fell. In the future, the supply of zinc in the market is still sufficient, and it is difficult to improve in the short term during the off-season of the zinc market. It is expected that zinc prices will consolidate at a low level.