SHANGHAI, Apr 3 (SMM) – The oil market was roiled over the weekend. On Sunday, Saudi Arabia and other OPEC members and oil producers announced production cuts by over 1.6 million barrels per day, accounting for 1.5% of global oil production. Sources said the Saudi’s move was an aggressive response to Biden administration's delaying Strategic Petroleum Reserve Plan last week. The White House also responded by saying that it was unwise for oil producers to reduce production.
Last Friday night, LME zinc opened at $2,932/mt and closed down $20/mt or 0.68% at $2,907/mt. Transaction volume stood at 9,622 lots, and open interest rose by 637 lots to 185,000 lots. LME zinc inventory added by 5,950 mt to 39,325 mt. Generally speaking, LME zinc reversed the upward course.
The most-traded SHFE 2305 zinc contract opened lower at 22,615 yuan/mt last Friday night and fluctuated upwards before closing at 22,675 yuan/mt, down 90 yuan/mt or 0.4%. Trading volume was down to 48,412 lots, and open interest fell 384 lots to 96,029 lots.
On the macro front, the market expected the Fed to pause rate hikes with the release of personal consumption expenditure (PCE) data and consumer expectations index. On the fundamentals, the operating rates of zinc ingot downstream sectors all dropped slightly, among which the average operating rate of zinc oxide enterprises fell 1.3 percentage points to 62.5% last week. The sluggish end-user consumption weakened its support for zinc prices, which trended lower and will remain rangebound.
