Asian Metal visits some lead-zinc trading companies and futures corporations in Shanghai

Lena Liu, assistant analyst of the Basic Metal Department of Asian Metal, visited some lead-zinc trading companies and futures corporations in Shanghai on July 3rd-4th, 2014, deeply talking about and discussing the lead-zinc market with each other. Strong increases in zinc prices recently have aroused wide attention with most participants believing that zinc prices are likely to remain high with fluctuations in H2.

Asian Metal visited Shanghai Shangming (Jingsheng) Shining Metal Material Co., Ltd. and talked with Zhang Xiaomei, the general manager assistant about zinc ingot price trend and trading status at present on the morning of July 3rd. Shangming Shining Metal Material is the largest zinc ingot dealer in Shanghai as well as across China with a daily trading volume of up to 3,000-4,000t and clients mainly of end users. Though zinc prices surged, the company’s zinc ingot deals remained stable due to placid demand from downstream market.

Then Asian Metal visited Shanghai JHC International Trading Co., Ltd. and shared opinions about current macro-economy conditions and the status quo of non-ferrous metal trade in Shanghai with Zhou Ye, the vice-general manager of the Metal Inner-trade Department in the morning of the same day. In the afternoon, Asian Metal interviewed Liu Shaobing, the market director of Lead-zinc-aluminum & Minor Metal Department, who specified the tendency of zinc prices and the status quo of import and consumption at present. Though the overall market development is not as good as usual, overall consumption remains stable. As a large dealer of zinc ingot in Shanghai, the company mainly sells the material to end users.

Asian Metal also visited Shanghai Jinke Metal Trading Co., Ltd. and talked in depth with Li Weijun, a member of the Investment Department about deals and price trends of zinc ingot on the spot market on the morning of July 3rd. Li portrayed that surges in zinc prices recently were favorable for traders, making the market more active. As a subsidiary trading corporation of Shaanxi Dongling Group, Jinke Metal is mainly involved in basic metal businesses.

On the afternoon, Liu visited Shanghai Oufan Trading Co., Ltd.(short for Oufan) and had an extensive communication on current zinc-lead market situation with Wang Qimin and Zhang Heng, general manager and business manager of the company. Oufan focuses on lead ingot and zinc ingot, mainly selling the former to end users and the latter to traders. The company sees stable deals this year.

That afternoon, Liu also visited the Shanghai-based subsidiary of Shaanxi Yuanyang Non-ferrous Resource. Wangjiao, zinc department director of the company, made some introductions about short-term zinc price trend and current trading situation for Liu. Although zinc prices increased significantly recently, supply of Chinese homebred zinc metal was not adequate as a result of some zinc smelters’ maintenance. Zinc prices fluctuated in wide ranges recently, so deals of the material in Shanghai were very active.

On the morning of July 4th, Liu called on Guotai Jun’an Futures and received warm reception from Li Peng, deputy director of the metals and energy research center senior Researcher in the company, Wang Rong and Xu Yongqi, both senior researchers of the department. The receivers believed that zinc prices increased continuously due to the expectation of output reduction from zinc mines and supply shortage around the world, but consumption grows slowly, for example, Chinese domestic infrastructure construction slows down and the real estate industry sees general performance, suppressing the zinc price increase to a certain extent.

Shanghai Huihong International Trading Co., Ltd. was also on liu’s visiting schedule that day and he had a in-depth exchanges on current nonferrous metals situation like Chinese domestic trade, import and export with Huang Fulong, vice-general manager, Mao Mao, a researcher and Xie Jin, a staff from the business department in the company on the afternoon that day. Huihong International Trading mainly runs business about base metals and precious metals and does some relative market researches as well. Xie claimed that as a result of the investigation at Qingdao Port, a lot of zinc from Shanghai-based bonded warehouses flooded into Chinese spot market recently, but as many zinc smelters reduced productions for maintenance, supply of Chinese homebred zinc was limited.