Zinc prices fell sharply in June

According to the data monitoring of SunSirs, the zinc market fell sharply in June. As of June 30, the zinc price was 24,164 RMB/ton, a sharp drop from the zinc price of 26,172 RMB/ton on June 1 at the beginning of the month, a decrease of 7.67%; the macroeconomic weakness intensified, the supply and demand in the zinc market were both weak, and the zinc price fell sharply.

Non-ferrous metals sector fell

Continued high inflation in the United States exacerbated market recession expectations, and the non-ferrous metal sector fell across the board. It can be seen from the base metal index and the non-ferrous metal futures price index of SunSirs: since the end of April, the non-ferrous metal-related index has continued to decline. Since the end of May, the base metal index and the non-ferrous metal futures price index have both fallen. Market concerns about the global economy intensified, the macroeconomic background of the metal industry deteriorated, and the zinc market followed suit.

National Bureau of Statistics PMI rose less than expected

It can be seen from the data of the National Bureau of Statistics that in June, the manufacturing purchasing managers' index (PMI) was 50.2%, an increase of 0.6 percentage points from the previous month and returned to above the threshold. The manufacturing industry has resumed expansion, and the domestic economy has recovered slowly, but the domestic economy has declined for three consecutive months. It recovered in June but still has a certain gap with the level of the same period last year and the growth level at the beginning of the year. The domestic economic growth is less than expected, and the demand for zinc market has declined.

The supply of zinc market decreased

The energy crisis in Europe continues, the start of zinc smelters has declined, Glencore and Trafigura have substantially withdrawn LME futures warehouse receipts, and the remaining inventory in LME Asian warehouses is only equivalent to half a day's global consumption. Zinc inventories fell sharply to the lowest level in at least 25 years, and the supply of zinc in the market fell sharply.

Market outlook

Analysts of SunSirs believe that the weak macroeconomic expectations have intensified, and the continued high inflation in the United States has exacerbated market recession expectations. It is expected that metal prices have peaked, and the rise in metal prices in the future is insufficient. The supply of zinc market is reduced, and the resistance of zinc price decline still exists. The overall zinc market is weak in both supply and demand. The rise in zinc prices is not supported enough, and the downside is blocked. It is expected that the zinc market will fluctuate downward slightly in the short term.

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