SunSirs: Throwing Rserves in Place, Accumulating Electricity Curtailment to Relax, Difficult to Stop the Rising Zinc Market

　　Zinc price trend in August

　　In August, zinc prices fluctuated slightly. As of August 16, the price of zinc was 22876.67 yuan/ton, an increase of 0.62% from the 22736.67 yuan/ton zinc price on August 1. In August, the zinc market rose more and more intensely, and the preheating trend of gold, nine and silver ten is gradually starting.

　　Secondary dumping of reserves to stabilize the zinc market

　　On July 29, the State Bureau of Grain and Material Reserves released the second batch of 170,000 tons of national reserve materials, including 30,000 tons of copper, 90,000 tons of aluminum, and 50,000 tons of zinc, to the market through online public auction sales. The country’s second dumping of reserves stabilized the zinc market and eased the upward pressure on zinc prices. The downward pressure on zinc prices increased and the upward momentum weakened.

　　Power cuts to relax the zinc market’s production desire to increase

　　Since May, power rationing has occurred in many provinces. With the arrival of the hot summer weather, power rationing has spread to Yunnan, Sichuan, Guangdong, Jiangsu, Jiangxi, Zhejiang, Henan, Inner Mongolia, Ningxia, Anhui, Hebei and other places. Electricity cuts have affected the production of zinc ingots, and the supply of zinc in the zinc market has decreased. As the hot summer draws to an end, low temperatures in various places have dropped, and it is expected that subsequent residential electricity and some industrial electricity will decline, alleviating the pressure on electricity supply. All regions of the country have basically lifted the power curtailment since last week, and the impact of the zinc smelter power curtailment on production has also been basically eased, and will not affect the current month’s output. Electricity cuts were relaxed, production in the zinc market increased, and supply in the zinc market increased.

　　Refined zinc output rises

　　According to Mysteel statistics, the total refined zinc output of 48 domestic zinc smelters in July was 455,400 tons, an increase of 3.9% from the previous month. The actual output in July increased by 17,084 million tons from the output in June. The output of the zinc market rose, and the momentum of the zinc market’s rising momentum weakened.

　　Overview and outlook

　　In August, the second dump of zinc storage was in place one after another, and the demand in the zinc market decreased. With the end of the summer, the power limit was relaxed, the output of the zinc market increased, and the supply of zinc market increased. The overall zinc market’s upward momentum weakened and downward pressure increased. However, in August, zinc prices still maintained a slight fluctuation. In addition to changes in supply and demand, the market outlook for the “golden nine silver ten” demand is expected to be the biggest support for the strong performance of the zinc market. In the future, the strong performance of the zinc market may continue, but the rise is slow, and a slight shock is expected to strengthen.

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