According to the Commodity Market Analysis System of SunSirs, as of July 19th, the zinc price was 20,292 RMB/ton, a decrease of 0.27% compared to the zinc price of 20,346 RMB/ton on July 9th. There was no upward support for the fundamentals of the zinc market, and the zinc price fluctuated and consolidated in a range in mid July.
Long and Short Gamed in Zinc Market
The US CPI for June, announced in July, only increased by 3% year-on-year, lower than the market estimate of 3.1%. The unexpected decline in CPI data led to a decline in the Federal Reserve's expectation of aggressive interest rate hikes. As of July 13, the U.S. Dollar Index had fallen for six consecutive trading days. The U.S. Dollar Index fell, and the non-ferrous metal market was strong.
Before the Federal Reserve's interest rate hike in July came to fruition, macroeconomic sentiment in the market was fluctuating. Traders believed that July would see a 25 basis point interest rate hike as scheduled, while the US dollar raised interest rates, weakening the non-ferrous metal market. On July 18th, LME zinc inventory increased by over 10,000 tons, and LME zinc inventory increased to 80,375 tons, breaking a new high since the end of June. The spot circulation was relatively loose, coupled with the continued impact of imported sources of goods. In July and August, some smelters on the supply side will enter the maintenance period, which may bring about significant supply reductions in August. Zinc smelting processing costs will rise, and the decrease in zinc smelting production will be limited. At the same time, imported zinc will also provide a certain supplement to the supply side, and the zinc market supply side may maintain a relatively loose supply, resulting in a bearish zinc market situation.
Market outlook
According to data analysts from SunSirs, macroeconomic sentiment was fluctuating, and strong support for non-ferrous metals was insufficient. LME zinc inventory had increased significantly, and domestic zinc supply was limited. The zinc market had sufficient supply. In the future, strong supply and weak demand will be the basic trend for a considerable period of time, and it is expected that zinc prices will consolidate weakly in the future.
