Granular Zinc Sulfate

Market Dynamics Report on Granular Zinc Sulfate

1. Price Trends
- Domestic Market: The mainstream quoted price range for granular zinc sulfate (heptahydrate) in the past week has been 5,200–5,500 RMB/ton, representing a month-on-month increase of approximately 3.5%. In some regions, prices have exceeded 5,600 RMB/ton due to rising transportation costs.
- International Market: The FOB China port price remains stable at 780–820 USD/ton. Growing demand in Southeast Asia supports export prices, while the European market has seen slight softening due to high inventory levels.

2. Supply and Demand Dynamics
- Supply Side: The operating rate of major domestic producers remains at 75%–80%. Some manufacturers have suspended production for maintenance due to environmental inspections, leading to regional supply tightness. Import volumes have decreased by 12% month-on-month, primarily due to rising international shipping costs.
- Demand Side: The agricultural sector (as a fertilizer additive) accounts for approximately 45% of demand. With the launch of spring fertilizer preparation, procurement volumes have increased by 20% month-on-month. The industrial sector (electroplating, chemicals) maintains stable demand, accounting for 50% of the total; however, downstream customers show limited willingness to accept higher prices.

3. Costs and Profits
- Raw material zinc concentrate prices remain at a high level (approximately 23,000 RMB/ton). Sulfuric acid prices fluctuate due to regional supply and demand differences (approximately 800 RMB/ton in East China and 600 RMB/ton in Southwest China). Comprehensive costs have been pushed up to 4,800–5,000 RMB/ton, compressing the industry's average gross margin to 8%–10%.

4. Inventory Situation
- Total domestic social inventory stands at approximately 28,000 tons, a 15% decrease from the previous month. Significant inventory drawdowns have been observed in East and South China. Port inventory has dropped to 12,000 tons due to increased export orders, reaching historic lows.

5. Relevant Policies and Events
- Environmental Policies: Some provinces have strengthened supervision of wastewater discharge from zinc sulfate production, increasing cost pressures on small and medium-sized enterprises.
- Trade Frictions: India has initiated an anti-dumping investigation on imported zinc sulfate, affecting short-term export orders.
- Logistics: Domestic railway freight rates have increased by 5%, and highway overloading controls have caused regional fluctuations in freight costs.

Analysis and Judgment
1. Short-term Supporting Factors: Concentrated release of spring fertilizer demand, supply-side maintenance and production cuts, and low inventory levels suggest that prices will remain high with volatile oscillations, with an upside potential of approximately 2%–3%.
2. Medium-term Risk Points: Fluctuations in raw material zinc concentrate prices, changes in export policies, and growing downstream resistance to high prices may trigger a price correction.
3. Regional Differentiation: Prices in East and South China remain firm due to strong demand, while prices in Southwest China are slightly lower due to transportation cost advantages, though supply is tight.

Forecast
1. Price Range: Domestic mainstream prices are expected to range between 5,300–5,600 RMB/ton over the next two weeks, while international FOB prices will remain stable at 780–820 USD/ton.
2. Demand Trend: Agricultural demand will continue until mid-April, while industrial demand remains stable. Overall demand is expected to increase by 15%–20% month-on-month.
3. Supply Changes: Some enterprises undergoing maintenance are expected to resume production in late April, with supply anticipated to rise by 10%. However, environmental restrictions may offset some of this increase.
4. Risk Warnings: Attention should be paid to the price trend of zinc concentrates, the progress of India's anti-dumping investigation, and the impact of changes in domestic logistics costs on prices.