What Pushes Spot Zinc Premiums down so Hard in Shanghai? SMM Analysis

SHANGHAI, Sept. 28 (SMM) – Spot premiums on regular domestic zinc brands in Shanghai fell rapidly over SHFE October zinc on September 27, down from 320-340 yuan per tonne on September 26 to 200-230 yuan per tonne, SMM data showed.

What drove down spot zinc so hard in Shanghai?

First, SHFE zinc price remains high. Price spreads between SHFE zinc contracts have expanded as the delivery date nears.

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Second, some traders sold actively to generate cash before the Chinese National Day holiday.

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Third, downstream buyers which had built stocks from last Friday, reduced purchases in the latter half of this week, SMM said.

Spot premiums will weaken further before the holiday, SMM added. 

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