SMM Zinc Market Morning Review (2015-4-1)

SHANGHAI, Apr. 1 (SMM) – Market concerns grew due to ongoing Greek crisis. US economy improved on positive economic indicators, causing the US dollar index to strengthen. This undermined effects from stimulus policies on China’s property market.

LME zinc prices opened at USD 2,111/mt Tuesday, and fell to USD 2,076/mt due to strong selling pressure, and closing at USD 2,080.5/mt, down USD 1.3/mt. Trading volumes were up 3,204 to 9,778 lots, and total positions increased 1,992 to 289,556. LME zinc inventories fell 2,625 to 513,125 mt.

SHFE 1506 zinc contract prices opened at RMB 15,975/mt Tuesday evening, then fluctuated between RMB 15,910-15,980/mt, and closed the day at RMB 15,920/mt, down RMB 120/mt or 0.75%.

Global stocks markets plummeted after news from China’s property market was absorbed. Euro zone March CPI was -0.1%, in compliance with market expectations. The number of Germany’s unemployment in March decreased 15,000, with seasonally adjusted unemployment rate hitting a new low of 6.4%. Conference Board’s March CCI was 101.3, topping the 96.4 expected. Home prices in the US’s 20 large cities rose 0.9% MoM, better than the 0.6% expected.

It was reported representatives that attend the talks on Iran’s nuclear issue will reach a draft of agreement within a few hours or a day, and the final agreement will be decided before June 30, causing crude oil prices to plunge. Ongoing Greek crisis pulled down the euro.

As of March 31, 46 countries will join the Asian Infrastructure Investment Bank (AIIB), with 30 becoming founding countries. The State Council announced the Deposit Insurance Act will take effect May 1, 2015, and the ceiling of insurance is RMB 500,000.

European and US stocks mostly rose. The US dollar index rose 0.58% as COMEX crude oil prices dropped 2.22%. LME base metals prices fell across the board.

China’s official PMI in March and ADP’s employment data for the US will be announced today. Promising US indicators will boost the US dollar index and weigh on LME zinc prices. LME zinc prices are expected to move between USD 2,065-2,095/mt today. SHFE 1506 zinc contract prices will fluctuate between RMB 15,900-16,000/mt, with spot discounts of RMB 100-70/mt against SHFE 1506 zinc contract prices.