5 hours Ago
SMM, February 28: As of February 28, the most-traded SHFE zinc contract closed at 23,425 yuan/mt, down 230 yuan/mt MoM, a decline of 0.97%. Zinc prices in February first rose and then fell, initially dipping to 23,010 yuan/mt, then climbing steadily to a high of 24,210 yuan/mt in late February before declining again.
The center of zinc prices slightly shifted downward in February. With the traditional peak consumption season approaching, what can be expected for zinc prices in March? From a macro perspective, after the February holiday, the US introduced a series of tariff policies targeting China and other countries, continuously disrupting market sentiment. Meanwhile, China proposed further expansion of trade-in policies for consumer goods and intensified fiscal and monetary policies, which improved macro sentiment and provided some support for February zinc prices.
With the Two Sessions set to convene in March, the market holds certain expectations, and further attention is needed on related macroeconomic disclosures. On the supply side, February coincided with the Chinese New Year holiday, and the reduced number of calendar production days, along with holiday-related shutdowns and maintenance, led to a significant decline in refined zinc production for February, according to SMM. As zinc concentrate TCs continue to rise, domestic smelters are gradually recovering profitability, with some already operating at a profit.
Smelters are showing increased willingness to ramp up production, and SMM expects domestic refined zinc production to rebound MoM in March. Additionally, the import window for refined zinc remained closed in February, resulting in limited inflows of imported zinc ingots. It is anticipated that zinc ingot imports will not see significant growth in March.
On the consumption side, this year’s Chinese New Year holiday spanned January and February. Downstream zinc enterprises generally resumed operations around the sixth day of the lunar calendar and fully recovered after the Lantern Festival. However, the overall number of production days was insufficient, leading to low demand for zinc ingots.
Furthermore, SMM reports that the post-holiday resumption of downstream zinc ingot production was somewhat slow, and downstream zinc consumption recovery still requires time. The market continues to anticipate the performance of zinc consumption in March. Looking ahead to March, on the fundamentals side, the rapid increase in zinc concentrate TCs has significantly weakened cost support for zinc prices, as some smelters have already turned profitable.
Coupled with the increased willingness of smelters to ramp up production, supply is expected to continue rising. At the same time, March and April are traditionally peak consumption seasons for downstream zinc, and zinc consumption in March is expected to recover significantly MoM. With mixed bullish and bearish factors on the fundamentals side, the market also needs to closely monitor subsequent macroeconomic disruptions.
For SMM lead and zinc industry data packages, please contact: Penghui Tang Phone: 15008461791.
