The zinc price of LME was once close to the threshold of 2600 US dollars, which was the highest since January of this year. The price of March ** rose by 3.69%.

1. Supply and demand relationship: According to the estimated data of CRU, the global refined zinc production in 2010 was 12.7 million tons, and the consumption was 11.95 million tons, with a surplus of 750,000 tons.

2. European market: The spot market for zinc in Europe is dull, transactions are inactive, and spot premiums have basically remained unchanged. Some traders stated that some buyers are only interested in purchasing a smaller number of sources, which is to buy and use them. Some European manufacturers have also stated that demand is low and LME warehouses are in stock. If they flow into the market, premium will drop. A London trader said that it received an inquiry from the galvanized sheet industry buyers about next year's orders, but few buyers are buying in the spot market. He believes that supply is tight and sources of goods flow from Europe to the United States.

3, the United States market:

In the first stage, the zinc supply in the US market stabilized at 4.5-5.5 cents/lb. The supply problem seems to have been resolved. The demand has also remained stable. In the early days when many buyers had already purchased some of the sources when the supply was tight, there was no need to purchase them in the spot market. Some buyers are seeking to determine the next year's premium, and some brass producers claim to receive a premium of 4.5 to 5 cents/lb for the first quarter of next year. He himself considers it to be higher and has not accepted it. Although buyers believe that the supply is stable, traders have indicated that the supply is tight, especially since the KIDDCREEK plant under XSTRATA was discontinued in June and 100,000 tons of supply could not be supplied to the market. Another trader said that the premium was close to 5-7 cents/lb. Some traders said that a buyer with no interest in buying eventually ordered 7.5-8 cents of premium, and some were obviously not prepared. Demand has been restored in industries such as galvanized sheet and brass.

The second stage: US market buyers are waiting and hope their inventory consumption can be slower because zinc prices are rising. It is not just that the higher zinc price of LME makes buyers take a wait-and-see attitude. The medium-term elections are approaching and there are many uncertainties. Especially the price. The rising price of zinc makes those buyers in need not rush to purchase, but first consumes the stock in hand. Premium premiums are 4.5 to 5 cents per pound, with the LME spot price as the base price. The premium for the No. 3 alloy is about 14 to 16 cents.

The third stage: As the price of LME zinc rose, the buyers in the U.S. market temporarily looked at the situation. Everyone was discussing when the price of zinc fell. This is uncertain. Everyone is also talking about the possibility that the premium zinc premium may rise next year. Some buyers said that the manufacturer intends to raise the premium zinc premium of next year to more than 5 cents. The demand remains the same and there is no obvious change. In general, the premium premium for special high-grade products is 4.5 to 5 cents/lb, and the premium for No. 3 alloy is 14 to 16 cents/lb. The PLATTS Premium Premium Premium was 4.75 cents/lb, and the No. 3 alloy premium was 15 cents, all based on the LME spot price.

Industry sources pointed out that infrastructure expenditures in several northern US states support zinc market demand. Zinc is mainly used in the galvanizing industry. This part of demand is offsetting the sluggish demand in the auto industry, which keeps the zinc premium at 4.5~ $5.5/lb. A galvanized industry source stated that after the government’s spending on upgrading highway bridges was increased, its company’s business volume in several northern states increased by 10%. Similar news was obtained from other sources. This part of the construction project is mainly led by the state government, not the federal government.

4. Asian Market: The zinc market in Singapore has fluctuated widely to between 60 and 100 US dollars, before it was between 90 and 100 US dollars. Buyers have been on the lookout. Some people said that most of the goods are locked in warehouse receipts**, and the actual demand is flat. When the zinc price is about $ 2,000, the buyer will be willing to purchase, but the current price has been much higher.

5, zinc concentrate processing fee:

Macquarie analysts believe that zinc concentrate processing fees may fall by 20% in 2011 because the Chinese smelting industry is competing. Duncan Hobbs, an analyst at the agency, said that processing fees for 2011 may decline, depending on the future changes in processing costs for spot zinc concentrates in the Chinese market. If it is not surprising that the zinc concentrate processing fee will drop by 20% next year, the current price gap between the spot zinc concentrate processing fee in the Chinese market and the 2010 annual zinc concentrate processing fee is approximately US$150. The annual processing fee is generally negotiated by mainstream zinc mines and smelters at the end of February each year, which coincides with the annual meeting of the New American Association. The annual zinc concentrate processing fee for 2010 is US$272.50/t, and the zinc price is US$2,500/t as the base price. It is 8% higher and 5% lower, ie when the spot price of LME zinc is higher than US$2,500/t, it will increase by 8%. When the above price fell below $2,500 and hit $2,000/t, it floated 5%. Based on analysts' data, the annual zinc concentrate processing fee is approximately US$265/t, which is lower than the base price of US$272, based on the price of zinc of US$2,300/t on October 7.

BNPPARIBAS analyst STEPHEN BRIGGS said that for the mines, there are too many copper and zinc smelting companies, so in terms of structure, processing fees should be at a very low level in the long run. In China, the number of shut downs for smelting companies is not enough to offset the increase, so the pressure for processing fee reduction still exists. Processing fees are a factor that affects the producers' output. Other factors include metal prices and exchange rates. As the world's largest refined zinc producer, NYSTAR has both mining and smelting operations. It not only needs to pay processing fees, but also charges processing fees. Industry insiders say that global smelting capacity is unlikely to be fully utilized because of tight supply of concentrates.

6, the domestic market: Customs data show that from January to September, China exported 35682t of refined zinc, an increase of 313.65%, imports 244,800 t, a decrease of 59.62%. The imported zinc ore was 2.4187 million tons, a year-on-year decrease of 12.54%. According to the National Bureau of Statistics, from January to September, the output of refined zinc in China was 3.829 million tons, an increase of 23.8% year-on-year, and the output of zinc concentrate was 2.773 million tons, a year-on-year increase of 31.9%.

7. Industry perspective: The international lead and zinc research group predicts that the global refined zinc will have a large excess of 161,000 tons in 2011, and this year it will have a surplus of 232,000 tons.