First, the price trend
According to data from the business community, the zinc price fluctuated in July, and the zinc price fell by 8.38% in July. As of July 31, the price of zinc was 21,597.50 yuan / ton, compared with the price of 23,572.50 yuan / ton at the beginning of the month (July 1), the price fell 8.38%, down 8.04%.
Second, the market trend analysis
Product aspects:
On July 31, London LME market zinc futures closing price of 2,625 US dollars / ton, compared with the beginning of the month (July 2) zinc closing price of 2,822 US dollars / ton, the price fell 197 US dollars / ton, July 31, London LME market spot price 2629.50 – 2630.00 US dollars / ton, compared with the beginning of the month 2914-2915 US dollars / ton price fell 285 US dollars / ton. On July 31, the futures price of Shanghai futures market closed at 21,640 yuan / ton, compared with the opening price of 23,355 yuan / ton at the beginning of the month, the price fell by 1715 yuan / ton. Futures zinc prices fell sharply, driving spot zinc prices down and zinc prices falling. However, from the price trend in July, it can be seen that since the end of July, the zinc price has stopped falling and fluctuated, and the zinc market has shown a warming trend.
Policy and regulation:
The United States sought public comment on the list of proposed products with a tariff of US$200 billion on the evening of July 10, local time. The United States intends to impose a 10% tariff on imports of goods worth $200 billion from China. Following the start of the Sino-US trade war on June 15, the US$200 million tariff plan introduced by the United States in July made the Sino-US trade war continue to heat up, causing market panic. The non-ferrous sector plummeted in July, but due to China’s zinc exports. Smaller, the trade war has limited impact on the zinc industry. After the market calms down, it begins to oscillate and adjust, and at the end of the month there is a rebound trend.
The “Opinions of the Central Committee of the Communist Party of China and the State Council on Strengthening Ecological Environment Protection and Resolutely Fighting Pollution Prevention and Control” was officially released, which marked the full launch of the pollution prevention and control battle directly deployed by the Party Central Committee and the State Council. The State Council has taken the lead in intensifying efforts to prevent and control air pollution, which means that the mines producing zinc concentrates are reduced and the smelting of refined zinc is declining, which will lead to a decline in zinc stocks in China, which will benefit the rise in zinc prices.
Overseas company
The Vancouver-based Trevali Mining Company’s zinc production in the second quarter more than tripled from the same period last year, mainly due to the increase in production of the two African zinc mines acquired by the company last year. The company said in a production report that zinc production in the quarter increased from 31.6 million pounds in the same period last year to 103.9 million pounds. Although there is a new acquisition of zinc minerals, the increase in global zinc supply cannot be ignored, and global zinc supply is in an oversupply state, which is a negative for the zinc market.
Third, the outlook outlook
The market panic caused by the Sino-US trade war is the main reason for the sharp fall in zinc prices in July. However, as time progressed, the market viewed trade wars becoming more rational. For the zinc market, China’s zinc exports were small, and the US’s tariff increase was difficult to influence the zinc market in China. The change in the zinc market is more Move with the direction of the international market. Business community analysts believe that the warming of the Sino-US trade war has increased the pressure of zinc price decline, the market panic has been bearish on the zinc market, but as the market psychology tends to be rational, the zinc market began to pick up. The exchange rate of the renminbi against the US dollar has risen, the purchasing power of the renminbi has declined, and the import cost of zinc ingots has increased, resulting in an increase The increase in costs and the warming of the market may increase the price of zinc in the market. However, as the overall zinc market is still in an oversupply situation, it is difficult for zinc prices to rise sharply. It is expected that the zinc price in the market will fluctuate and adjust, or there will be a slight increase. Over 23,000 yuan / ton.