Price Trend
According to the monitoring data of business associations, the domestic zinc price fluctuated and fell in July. As of July 16, the price of zinc was 19470.00 yuan/ton, down 3.98% from 20276.67 yuan/ton at the beginning of the month. Zinc prices fell by 8.55% over the same period last year.
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II. Market Trend Analysis
Product output statistics:
According to a recent report by Fitch Solutions, global zinc production increased by 2.1% to 13.3 million tons in 2019 from a year earlier, then to 15.8 million tons in 2028, an average growth of 2.0%. Fitch expects China’s zinc production to rise from 4.3 million tons in 2018 to 4.4 million tons in 2028, an average annual growth of 0.2%. Despite its low growth rate, China will remain the world’s largest producer of zinc. Fitch predicts that China’s position will fall from 33% of global mine production in 2018 to 28% in 2028. Overall, the global zinc mineral production has increased steadily, and the supply of zinc in the city has increased, which is bad for zinc price.
Overseas enterprises:
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New Century Resources, a basic metals mining company, reported that its zinc production had reached a quarterly high in the three months to June. The company’s production of the same name project in Queensland continues to climb. From April to June, the project produced 20450 tons of zinc from 42500 tons of zinc concentrate. In the same period last year, the output of zinc concentrate was 37500 tons. Nyrstar, a metals and mining company, recently said it had delayed force majeure at Port Pine Lead and Zinc Smelter in Australia until the last week of July. Overall, the output of zinc mining enterprises has risen, the supply of zinc has increased, and the pressure of zinc price dropping in the future has increased.
Downstream demand:
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According to the statistics bureau, GDP grew by 6.3% in the first half of the year. China’s GDP in the second quarter was 6.2% year-on-year, with an estimated 6.3% and a previous value of 6.4%. In the first half of the year, investment in real estate development in China increased by 10.9% compared with the same period last year, and increased by 11.2% from January to May. From January to June, urban fixed assets investment in China increased by 5.8% year-on-year, with an estimated 5.6% and a previous value of 5.6%. Macroeconomic environment performance is still acceptable, overall zinc price has a certain advantage; infrastructure, real estate and fixed investment growth, zinc market demand has increased, zinc ingot demand has a certain advantage.
3. Prospects for the Future Market
Bai Jiaxin, an analyst of business associations, believes that: on the supply side, global zinc mineral energy continues to climb, zinc supply growth, zinc market is positive; on the demand side, overall macroeconomic growth is stable, and investment in infrastructure is also warming up, which is good for zinc market demand, but macroeconomic growth is not as expected, and zinc market has insufficient momentum to rise. It is expected that the fluctuation of zinc price will remain stable in the future.