Posted on 19 Nov 2020
China’s national price of zinc ingot (99.995%) came off a 17-month high of Yuan 20,735/tonne ($3,156/t) on November 10 to settle at Yuan 20,361/t as of November 13. Both prices include the 13% VAT. Domestic zinc demand has been losing steam so far this month, exerting downward pressure on prices, according to Mymetal’s latest weekly report. Mymetal is Mysteel’s information service for nonferrous products.
“Traditionally, November is a low demand season but added to that this year is the fact that downstream galvanized steel producers in (North China’s) Tianjin municipality and Tangshan city have been under production restrictions,” a researcher based in Shanghai noted, observing that “zinc consumption fell notably.” Chinese galvanized steel producers consume over half of the country’s zinc ingot output, and many of these users are based in the North China region.
Meanwhile, the country’s hardware producers have also been struggling with a slow reduction in both domestic and export orders. Due to their lower appetite for ingots, zinc stocks in China’s six major cities reversed up last week, albeit by a mere 500 tonnes on week to 135,600 tonnes as of November 12 – a comparatively low level this year.
Nevertheless, supplies of zinc concentrates remain tight, which to some degree, has provided support for the zinc price. Last week, the treatment charges (TCs) of domestically-produced 50% grade zinc concentrates decreased by another Yuan 50/t on week to Yuan 4,650/t as of November 13. The TC has been in a continuous decline since the end of August, losing a total of Yuan 700/t since then.
Last week, the TC for 50% grade imported zinc concentrates stayed unchanged on week at $90/t, though this represented a sharp decline from $170/t at the end of August.
Last week too, the transportation of zinc concentrates from Northwest China’s Xinjiang Uygur Autonomous Region, a key mining region, was still impeded due to newly confirmed cases of COVID-19 there, Mymetal’s survey showed.
Written by Olivia Zhang, zhangwd@mysteel.com and Mary Li, lixiaomei@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
Source:Mysteel Global
