Persisting Bearish Sentiment Weighed on LME Zinc Prices

SHANGHAI, Apr 18 (SMM) - The data from the US Treasury Department on Monday showed that foreign holdings of US Treasuries fell in February as US bond yields rose steadily. An official of Group of Seven (G7) said the G7 will stick to a price ceiling of $60/barrel for Russian seaborne oil. The dollar rose after New York state’s manufacturing activity rose in April for the first time in five months, helping to bolster expectations for a May rate hike by the Federal Reserve. ECB President Christine Lagarde said the ECB could considering changing its 2% inflation target, but only after the inflation is brought down to that level.

LME zinc opened at $2,850.5/mt overnight and closed at $2,835/mt, down $11/mt or 0.39%. Trading volume stood at 4,863 lots, and open interest added 70 lots to 175,000 lots. The market's concerns about the Fed's subsequent interest rate hikes re-emerged, and the pessimistic macro sentiment still weighed on LME zinc prices.

Last night, the most-traded SHFE zinc 2305 opened at 22,380 yuan/mt and finally settled at 22,350 yuan/mt, down 95 yuan/mt or 0.42%. The trading volume was 42,000 lots, and open interest decreased 2,995 lots to 86,000 lots.

Although the recent power rationing in Yunnan has led to a slight decline in the expected production of refined zinc in April, it has little impact on the overall sufficient supply in China. Therefore, it is expected that SHFE zinc prices will hardly trend higher.