In middle March, SMM conducted a survey on 43 major zinc smelting enterprises in China.The survey shows that 46.5% smelting enterprises expects zinc price to continue to fluctuate, and the figure is up 6.5% from the previous month; bullish enterprises take up 27.9%,up 1.2%; enterprises adopting a pessimistic attitude account for 25.6%, down 7.7%. Enterprises which see a flat market account for 46.5%. In their view, due to lack of major news at home and abroad, in the future zinc price will keep fluctuating in the range of 15,000-16,000 yuan/ton. In Europe, Greek debt issue came to an end for the time being, and the impact of European on the market will weaken in the near term. In the U.S., as the recent positive business data have been gradually assimilated by the market, and no major business data will be released in a short term, the market is likely to become more prudent. In China, the February CPI was better than expected. It is believed that the figure lays the foundation for loosening monetary policy in China, but it still takes time before that comes true. In the absence of major news, investors will become more cautious, and zinc price will continue to fluctuate. Bullish enterprises take up 27.9%. In their view, zinc price hit the bottom in early March, and it will rebound slightly soon. There are two main drivers for the rise of zinc price: first of all, recovery of downstream consumption. This year,downstream enterprises had a long holiday for the Spring Festival, and many enterprises did not resume production until after the Lantern Festival. As downstream production got back to normal, enterprises’ demand for raw materials will increase, giving a boost to zinc price.

Secondly, the Greek debt issue’s impact on the market has weakened, and upbeat business data from the U.S. have had a positive impact on commodity prices. Nonetheless, these enterprises say due to limited upward push, there is not much space for zinc price to go up. Bearish enterprises account for 25.6%. In their opinion,zinc price could further decline, mainly because of the sluggish domestic consumer market. Recently, at the Fifth Plenary Meeting of the Eleventh National People's Congress, Premier Wen Jiabao pointed out that in 2012 China’s GDP growth target is 7.5%, the lowest in eight years. The slowdown of the domestic economy leads to a sluggish consumer market, including downstream enterprises in the zinc industry.According to bearish enterprises, after the Spring Festival downstream enterprises’ demand for zinc products has not looked up significantly. When zinc is not wooed by investors, zinc price will get weighed down by the fundamentals. Moreover, high zinc ingots stock in China also keeps zinc price from going up.