SMM Zinc Market Daily Review (2015-1-14)

SHANGHAI, Jan. 15 (SMM) – SHFE 1503 zinc contract prices opened lower at RMB 16,080/mt Tuesday evening, then hovered around RMB 16,100/mt, and closing at RMB 16,105/mt, down RMB 220/mt or 1.35%. Trading volumes were up 34,564 to 102,048 lots, and total positions increased 3,932 to 164,262. SHFE 1503 zinc contract prices opened at RMB 16,050/mt on Wednesday, then inched lower, dipping to as low as RMB 15,550/mt in the morning, and closing at RMB 15,630/mt, down RMB 695/mt or 4.26%. Trading volumes surged 420,596 to 573,954 lots. Total positions were up 26,528 to 186,858. SHFE 1503 zinc contract prices are expected to fall further.

#0 zinc prices were between RMB 15,950-16,030/mt, with spot premiums of RMB 260-330/mt against SHFE 1503 zinc contract prices. #1 zinc prices were RMB 15,900-15,940/mt. SHFE 1503 zinc contract prices dived to RMB 15,550/mt after opening, then moved around RMB 15700/mt during 10:30-11:30 am. Smelters withdrew as zinc prices plunge, with trading mainly between arbitrage traders. When combined with a large inflow of imported zinc, domestic zinc prices were weighed down.  Downstream buyers purchased modestly, and overall transactions remained quiet. Huize #0 zinc prices were RMB 420-430/mt above SHFE 1503 zinc contract prices. Shuangyan #0 zinc prices were RMB 15,990-16,030/mt, RMB 300-330/mt above SHFE 1503 zinc contract prices. Mengzi, Qilin and Qinxin zinc prices were between RMB 15,950-15,970/mt, RMB 260-280/mt above SHFE 1503 zinc contract prices. Indian, Peruvian and Namibia’s zinc prices were between RMB 15,850-15,900/mt, RMB 180-200/mt above SHFE 1503 zinc contract prices. SHFE 1503 zinc contract prices consolidated in the afternoon, with spot premiums between RMB 270-320/mt.