OfBusiness Zinc Dailies

10th June’23

Price

• LME zinc closed at $2404.5/mt yesterday after reaching a high of $2432/mt.
• MCX Zinc closed at Rs.214.3/kg
• SHFE zinc closed yesterday at 19705 yuan/mt.
• The premium of Shanghai zinc ingot CIF (bill of lading) is $130-150/mt; the premium of Shanghai zinc ingot bonded warehouse (warehouse receipt) is $140-160/mt.

Demand and Supply

• Research by Trafigura Research and industry estimates that annual demand for zinc will increase by 20% from current levels by 2030.
• Zinc will still have a deficit of more than 10% by 2030. A 10% shortfall is equivalent to 150% of Australia’s entire zinc mine supply, or 5 to 6 new “mega mines”.
• Zinc LME inventories reduced by 725MT to 85800MT.

News

• Investors also hoped that Beijing would roll out supportive measures soon to bolster the embattled property sector, which consumes a vast amount of metals.
• The Reserve Bank of India (RBI) left the main policy instrument, repo rate, unchanged at 6.50% for the second consecutive monetary policy, giving relief to home, vehicle and other retail borrowers from an increase in equated monthly instalments (EMIs).

OFB’s Opinion

• Based on the current market expectations for domestic incremental policies, we predict that there may be slight fluctuations or rebounds in the market. However, we do not anticipate any significant incremental stimulus for the traditional real estate or infrastructure fields downstream of zinc. Furthermore, the current fundamentals do not appear to be optimistic. As a result, we believe that zinc prices will continue to weaken after a brief rebound.