SMM January 24 News:
Price: Recently, the main macro-driven logic lies in the uncertainty surrounding the fiscal and tax policies after US President Trump's inauguration, as well as the positive expectations for domestic policies from the Two Sessions. Currently, uncertainties remain in China-US relations, with attention on subsequent US tariff adjustment policies. On the fundamentals side, smelters' raw material inventory remains at a high level. In December, zinc concentrate imports exceeded 457,000 mt, higher than expected, and TC steadily increased. The losses of smelters have narrowed, and with the continued rise in TC, smelter production is expected to further increase. Attention should be paid to the degree of realization. Meanwhile, December refined zinc imports reached 32,000 mt, and January imports are expected to remain around 30,000 mt. Overall supply in January is expected to continue improving MoM. In terms of consumption, domestic fiscal policy support in Q1 is expected to be strong, with significant issuance of government bonds. Additionally, State Grid Corporation of China's investment in 2025 is expected to exceed 650 billion yuan for the first time, accelerating the progress of power grid projects. Coupled with the "trade-in" policy for home appliances, zinc consumption is expected to be boosted. Although downstream enterprises have mostly closed for the Chinese New Year, social inventory remains at a seasonal low of 62,000 mt, providing support for zinc prices at the bottom. Attention should be paid to the extent of inventory buildup after the holiday. Considering that the inventory buildup during the Chinese New Year may fall short of expectations and with the support of domestic policy expectations, the likelihood of zinc prices continuing to decline after the holiday is relatively low if there are no significant overseas macro risks. However, during the Chinese New Year, overseas macro risks remain significant, and it is recommended to prioritize risk aversion by exiting positions.
(The above information is based on market communication and comprehensive evaluation by the SMM research team. The information provided in this article is for reference only and does not constitute direct investment research advice. Clients should make cautious decisions and not replace independent judgment with this information. Any decisions made by clients are unrelated to SMM.)
