Zinc Prices Rise Further on Positive Macro Factors

SHANGHAI, Mar 2 (SMM) - On the macro front, China's February official manufacturing PMI came in at 52.6, a new high since April 2012. Caixin manufacturing PMI was released at 51.6, and business confidence index rose to a 23-month high. All these readings suggested that the manufacturing sector in Asia was embracing a strong recovery, with China taking the lead. US February ISM manufacturing PMI rose for the first time in six months, but was still in the contraction range. The price index rebounded greatly, highlighting inflationary pressure. The Fed officials called for 5% or more interest rates to last until next year, and the FOMC vote committee did not rule out the possibility of 50 basis points in rate hike this March. China’s Ministry of Industry and Information Technology stressed the importance to accelerate the development of the core industries of the digital economy, increase support for arithmetic infrastructure empowerment, and promote fast mergers and acquisitions of key industries. 

LME zinc rose and closed at $3,134/mt in overnight trading, up 3.28% or $99.5/mt. LME zinc inventory decreased by 125mt to 33,225 mt.

SHFE zinc closed with gains at 23,600 yuan/mt overnight. The zinc prices are still full of rebounding potentials with the support of strong macro readings such as PMI. The strengthened bearish sentiment will keep zinc prices moving sideways.