SMM Zinc Market Morning Review (2015-5-14)

SHANGHAI, May 14 (SMM) – LME zinc prices opened at USD 2,352/mt, then touched as high as USD 2,376/mt during Asian trading hours. But during US trading hours, LME zinc prices rolled back early gains despite a weakening US dollar index, and closed at USD 2,338/mt, down USD 15.5/mt or 0.66%. Trading volumes decreased 3,252 to 10,137 lots, and total positions grew 7,671 to 339,104.

SHFE 1507 zinc contract prices opened at RMB 17,150/mt Wednesday evening, then dropped below RMB 17,000/mt, and closed at RMB 16,935/mt, down RMB 105/mt or 0.62%. Trading volumes increased 47,506 to 107,528 lots, and total positions fell 10,638 to 133,764.

China’s industrial output, investment and retail sales in April fell short of market expectations. M2 growth hit a new low. This suggests pressure for China’s economy, weighing down base metals prices.

Eurozone Q1 growth was 0.4% QoQ, up from Q1’s 0.3% increase, and with YoY growth of 1%, also up from Q1’s 0.9% rise. Industrial output was below market expectations, though. US retail sales in April held stable, while core retail sales only rose 0.2%, both falling short of market expectations, and weighing down the US dollar index to fall to a 3-month low. The EUR:USD increased in response.

COMEX crude oil prices fell slightly. Gold prices closed up 2.2% at USD 1,218.20/mt. European and US stocks markets fell across the board. LME base metals prices were mixed.

LME zinc prices are expected to move between USD 2,325-2,355/mt today. SHFE 1507 zinc contract prices will fluctuate between RMB 16,890-16,990/mt, with spot discounts of RMB 90-120/mt against SHFE 1507 zinc contract prices.