SunSirs: Basis is Getting Bigger, Zinc Market Arbitrageurs are more Willing to Intervene

　　The trend of zinc prices is slowly rising this week

　　This week, the price of zinc first rose and then fell, and the overall zinc price fluctuated slightly. As of August 23, the price of zinc was RMB 2,2790.00/ton, a slight increase of RMB 2,2770.00/ton, or 0.09%, from last weekend’s zinc price; it was RMB 22,736.67/ton, or 0.23%, compared with the price of zinc on August 1st.

　　On August 20, 2021, the main basis of zinc (Yangtze River Nonferrous) was 850 yuan/ton. As of August 20, 2021, the maximum basis of zinc (Yangtze River Nonferrous) 180 days was 875.00, the minimum was 215.00, and the average was 612.58. The maximum basis of the 90-day main force is 850.00, the minimum is 380.00, and the average is 683.73. Basis spreads have continued to strengthen recently, and the willingness of hedgers in the futures market has increased.

　　Market Overview

　　Recently, the basis has become larger, the price difference between the spot market price and the futures market price has widened, and the spot market value-added is greater than the futures value-added. The downward pressure on the spot zinc market is increasing, and the willingness of the futures market to sell hedges has increased. The widening basis attracts arbitrageurs to intervene. The recent arbitrage investment opportunities are relatively large. Investors should pay attention to buying and selling opportunities.

　　Related listed companies: Zhongjin Lingnan (000060), Chihong Zinc Germanium (600497).