Looking Forward To The Development Trend Of Zinc Alloys-MINDWELL

Low inventory status, zinc price volatility will increase

 In 2021, the supply of the zinc industry will be relatively loose, and zinc ingot spot and futures will be in a low inventory at the same time. It is expected that the volatility of zinc prices will increase in 2022.

On the supply side, zinc mines are in a state of supply shortage from 2020 to 2021. With the rise in zinc prices, mines at home and abroad began to expand production, and the supply of zinc ore began to increase in 2018, and the supply and demand balance began to narrow from shortage and then became loose. Due to the long recovery cycle of mines, it is expected that the supply of zinc ore will increase in 2022. For smelters, due to the increase in zinc mines, the dominant position of mines has declined, and processing fees have also been continuously increased. Zinc mines have increased and processing fees have continued to increase. Smelters have the motivation to expand production, but they are subject to pressure from the environmental protection side and limited capacity release.

In terms of inventory, both futures and spot inventories of zinc are at a historically low level.

On the demand side, the macroeconomy is expected to be in a downward state in the next 2-3 quarters, and a big turning point still needs to be patient. The growth rate of the main downstream zinc plating demand for zinc has slowed down, but overall there is still a slight growth rate; at this stage, the zinc ingot inventory is historically low, and the replenishment process is relatively slow.

Outlook: the future

The products of the zinc alloy die-casting industry will become more and more diversified, the technical level of the industry will become higher and higher, the product quality will steadily improve, and competition and the market will be further rationalized. Coupled with China's further regulation of the industry and the implementation of preferential policies in related industries, the zinc alloy die-casting industry will have huge room for development.