According to the data monitoring of business associations, zinc prices continued to fall in August, but there was no upward trend in zinc market. As of August 23, the price of zinc was 18840.00 yuan/ton, down 3.68% from 19560.00 yuan/ton at the beginning of the month, and 12.23% from the same period last year.
II. Market Trend Analysis
Domestic Zinc Production
Date: Monthly output (10,000 tons) cumulative output (10,000 tons) year-on-year growth (percent) cumulative growth (percent)
July 2019 51.2 343.8 17.4 6.1
June 2019 51.3 281.5 10.3 2.3
May 2019 48 226.9 7.4-0.6
April 2019 46.5 176.5-0.4-4.4
March 2019 45.3 130.6 0.4-5.1
February 2019 – 85.1 – 8.2
December 2018 50.9 568.1-1.7-3.2
November 2018 52 517.7-7-3.3
October 2018 50.1 465.2-7.6-3.1
September 2018 45.6 414.6-10.1-2.6
August 2018 43.1 369.5-7.9-1.4
July 2018 43.9 325.9-3.5-0.6
June 2018 47.5 282-5 0
May 2018 45.7 234.5 0.4 1.6
April 2018 48.1 190.2 4.8 2.8
March 2018 46.9 142 0 1.7
February 2018 – 95.7 – 2.5
December 2017 57.6 622 7.3-0.7
November 2017 60.3 565.3 7.5-1.3
October 2017 57.7 505.4 3.8-2.1
September 2017 53.7 449.4-2.7-2.5
August 2017 49.4 395.7-4.6-2.3
July 2017 47.6 346.2-6.3-2
In 2019, the production of zinc increased month by month, and the domestic zinc production increased greatly. The supply of zinc in China changed from insufficient supply to excess supply. As of July 2019, zinc production has increased by 6.1% year-on-year. The supply of zinc is excessive, and the price of zinc in the future is not optimistic.
Housing fever abates and zinc demand is expected to decline
Data from the National Bureau of Statistics show that real estate investment, sales, funds and other data show a downward trend from January to July. The investment in real estate development increased by 10.6% year on year, and the growth rate dropped by 0.3 percentage points compared with the first half of the year; the new housing construction area of real estate development enterprises increased by 9.5% and the growth rate dropped by 0.6 percentage points; the capital in place of real estate development enterprises increased by 7.0%, and the growth rate fell by 0.2 percentage points; the sales area of commercial housing was 887.83 million square meters, down by 1.6 percentage points over the same period of last year. 3%; the area for sale of commercial housing is 498.76 million square meters, which is 2.86 million square meters less than that at the end of June, down 8.4% from the same period last year; the area for sale has been reduced for seven consecutive months, with the area for sale falling 500 million square meters for the first time in six years. The overall decline in real estate data, the demand for non-ferrous metals has declined significantly, and the demand for zinc has declined.
Car consumption fell sharply in July
In July, car sales fell by 2.6%, showing a drop from a positive growth of 17.2% to a decline of 2.6%. Because of the change of emission standards in June, many manufacturers and distributors took many promotional activities in June, which led to a 17.2% increase in automobile sales in that month. The automobile consumption in the future was overdrawn by the consumption front, and the demand for zinc in the automobile industry declined.
3. Prospects for the Future Market
Bai Jiaxin, a business analyst, believes that domestic zinc production has increased month by month, and zinc production has increased substantially in 2019. Zinc market has gradually changed from short supply to over demand. On the downstream demand side, real estate performance is weak, demand for zinc market is negative, consumption of automobile industry is declining, and demand for zinc market is not good. Generally speaking, the supply of zinc in the future city increased steadily, the demand of zinc city was bad, and the supply and demand of domestic zinc city was in excess of demand. Zinc price has not enough power to rise and pressure to fall has increased. It is expected that zinc price will fluctuate and fall in the future, and the zinc market will be prosperous for a long time.