Copyright @ 2011-2022 XBet All Rights Reserved.

XMLMap

Will Suppressed Zinc Demand Be Releaseor Disappear Once foAl

2022-06-08 09:48

Will Suppressed Zinc Demand Be Released or Disappear Once for All Following the End of COVID Lockdown in Shanghai?

Will Suppressed Zinc Demand Be Released or Disappear Once for All Following the End of COVID Lockdown in Shanghai?

And in light of restricted port trade, some of the orders from European countries and the US have flowed to other countries like Southeast Asia, which, unfortunately, may never be retrieved.

SHANGHAI, Jun 7 (SMM) - Since March 2022, downstream consumption has been significantly impacted by the goal of dynamic zero-COVID, with which Shanghai has been locked down for a full two months and only resumed work and production on June 1. During this period, downstream processing enterprises were affected by rising raw material prices, freight costs, labour shortages as well as the supply chain crisis. The overall operating rates have been quite disappointing. However, after Shanghai is fully released from COVID lockdown, will the orders that disappeared during the pandemic resurface or disappear forever?

From the distribution of zinc downstream enterprises, they are mostly located in east and north China, which account for up to 70% of the total. In terms of the outbreak of the pandemic, both the Shanghai-centred east China market and the Tianjin-centred north China market suffered significantly from the impact of the pandemic, leading to a greater impact on the broad downstream market.

According to SMM research, most companies are relatively pessimistic about the subsequent market. In the galvanising market, although the production of galvanised sheet (strip) remained relatively stable, stocks of finished products kept piling up mainly for two reasons.

1. Falling export orders: In the face of global economic downside risks, the overall demand in overseas markets weakened. And as overseas enterprises gradually resume work and production, the robust export market saw last year has almost disappeared. Therefore, Chinas galvanised sheet exports show a downward trend, and the proportion of exports in domestic production fell from 40% to some 30% recently.

2. Shrinking domestic demand: As a result of the overall downturn in the real estate industry, the previously outstanding year-on-year growth rate of new housing completions has slumped to nearly 0%, while the readings like operating rates and home sales also performed relatively poorly. In addition, due to the restructuring of the auto industry, Chinas auto production and sales also failed to post an improvement. That is, domestic zinc consumption continued to weaken significantly.

The first quarter of 2022 saw a year-on-year decline in home appliance production, which got off to a slightly unfavourable start of the year due to the pandemic and other factors. With domestic sales in the doldrums, export orders were likewise down year-on-year due to the impact of overseas companies resuming work and production.

And the severe pandemic has suppressed domestic consuming willingness amid the traditional seasonal high in the home appliance industry in April, and the orders disappeared during this period has forever disappeared even after the COVID lockdown was lifted.

Currently speaking, the introduction of policies such as the green home appliance subsidy in many parts of China, combined with the 618 online shopping festival and other activities, will boost the consumption to a certain extent.

Similarly, the general life span of home appliances is about 10 years, and a new round of home appliance replacement based on the last round of home appliances promotion in the countryside will also contribute some of the growth. However, due to the sluggish new housing completion, Chinas home appliance industry could hardly post any surprises in the long run.

As a result of the local outbreak of the pandemic in Shanghai, the downstream consumption in China has been extensively impacted. Based on the data, most of the downstream enterprises maintained poorer operating rates than last year, which is close to the low seen at the beginning of the first COVID breakout in China. High raw material prices, logistics and transportation difficulties and rising transport costs have led to a lack of confidence in market consumption, causing market demand to shrink rapidly.

However, with the order of full resumption of work and production in Shanghai on June 1, the demand will be partly released. But on the other hand, Shanghai, as the countrys most important trade hub, has cast an influence to the enterprises across the country to varying degrees due to the two-month-long lockdown. And in light of restricted port trade, some of the orders from European countries and the US have flowed to other countries like Southeast Asia, which, unfortunately, may never be retrieved.

For queries, please contact Frank LIU

For more information on how to access our research reports, please emailservice.

The Lead Prices Remained Decline and the Transactions were Modest [SMM Afternoon Comment on Lead]

During the day, SMM 1 lead prices continued to fall, the discounts of smelters remained unchanged compared with yesterday.

SMM Analysis: Factors to Watch after SHFE Zinc Hit New Low

SHANGHAI, May 10 (SMM)  The most-traded SHFE zinc contract crashed below 26,000 yuan/mt to 25,355 yuan/mt last night, its lowest since March 22.

Supply Tightness of Copper Cathode in East China Gets Eased

According to the SMM survey, at present, the supply tightness of copper cathode in east China has been greatly alleviated.

Molybdenum Prices Likely to Fall as A Large Mine Lowered Its Offers

On May 6, a large mine in Heilongjiang province, which has been silent for a long time, suddenly offered concentrate available for sale, and its 50-55% molybdenum concentrate was as low as 2,780-2,800 yuan/mtu, 40-60 yuan/mtu lower than the current market price.

SMM Morning Comments (May 5): LME Base Metals Closed Mostly with Gains on Falling US Dollar Index after Paying Off

LME base metals closed mostly with gains as the US Fed Chair Powell suggested that a 75 basis point rate hike is not an active choice in the future, which pulled down the US Dollar index which had paid off in previous sessions.

Pilbaras First Auction Results in 2022 Came out with a Price of $5,650/mt

Pilbaras first auction results in 2022 came out with a price of $5,650/mt.

SHFE Nickel Fell Nearly 8% Today and may Continue to Fall after the Import Window Opens

SHFE nickel prices kept dropping today. As of around 14: 52, the prices were 219,850 yuan/mt, down 7.97%.

Chinas Tungsten Exports Hit a New High due to the Russia-Ukraine Conflict

According to the latest customs data, in the first quarter of 2022, China exported a total of 6,450 mt of tungsten products, a year-on-year increase of 28.1%.

Analysis of Iron Ore Price Trend in Q2 amid the Intertwining of Long and Short Factors

Recently, the long and short funds intertwined, while prices of iron ore futures fluctuated. Analysis of the main influencing factors is as follows.

SMM Analysis: Can the Notice Issued by the Ministry of Transport Relieve the Transportation Pressure of Aluminium Scrap?

[SMM Analysis: Can the Notice Issued by the Ministry of Transport Relieve the Transportation Pressure of Aluminium Scrap?] On April 18, the Ministry of Transport issued a document requiring to directly let pass truck drivers with negative nucleic acid test certificate within 48 hours, green health code and normal body temperature. How about the implementation in various regions?

The 7th China International New Energy Conference 2022

SMM sincerely invites you to attend the 7th China International New Energy Conference 2022

SMM Evening Comments (Jun 2): Shanghai Nonferrous Metals Increased Broadly amid Stimulus from the Macro front

China Weekly Inventory Summary and Data Wrap (Jun 2)

SMM Morning Comments (May 25): Base Metals Closed Mostly with Losses on Demand Concerns

SMM Morning Comments (Jun 1): Base Metals Closed Mostly with Losses amid Market Concerns over the Feds Hawkishness

SMM Morning Comments (May 30): Base Metals Closed Mostly with Gains on Easing Worries over Aggressive Monetary Tightening and Expected Demand Recovery

Notice: By accessing this site you agree that you will not copy or reproduce any part of its contents (including, but not limited to, single prices, graphs or news content) in any form or for any purpose whatsoever without the prior written consent of the publisher.