SMM Morning Review - 2010/1/8 Zinc Market-Shanghai Metals Market

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SMM Morning Review - 2010/1/8 Zinc Market

SMM Insight 11:11:24AM Jan 08, 2010 Source:SMM

SHANGHAI, Jan. 8 (SMM) -- LME Market 

 
Close
(USD/mt)
Premium/Discount
Volume
(lot)
Position
(lot)
Inventory
(mt)
3-mth Contract
Spot – 3 mth
Dec. Average
2,413
-35
58,321
230,995
462,634
Jan. 7th
2,593
-32
69,451
227,935
490,100

SHFE Market

 
Zinc – Spot Month (RMB/mt)
RMB/USD
SHFE Close
Settlement
Weighted Ave.
Dec. 16th              
18,390
18,370
18,371
1:6.8280
Jan. 7th                
21,300
21,650
19,699
1:6.8276

 
Zinc – 3mth (RMB/mt)
Shanghai Spot
#0 Zinc Ingot
SHFE Close
Settlement
Weighted Ave.
Dec. 16th              
18,700
18,680
18,684
18,100
Jan. 7th                  
21,525
21,815
19,440
21,250

Summary

On Thursday, all major SHFE zinc contracts fluctuated widely, and first opened high and moved higher, but later plunged, with SHFE 1005 zinc contract even experiencing a fluctuation range of nearly RMB 2,000/mt, and SHFE three-month zinc prices closed down at RMB 21,725/mt. Transactions were very bullish, and positions declined significantly by nearly 15,000 lots, indicating the withdrawal of funds after profit-taking.

In spot markets, #0 zinc was traded at RMB 21,250/mt in Shanghai market, but offers were mixed, with offers for selected brands heard between RMB 21,300-21,500/mt, and with low interest in moving cargos. #1 zinc was traded at RMB 21,200/mt, and downstream consumers were cautious due to wild fluctuations in SHFE zinc prices, resulting in neutral trading sentiment.

As to macro policies, China's central bank surprised the market on Thursday by raising the auction yield of its three-month bills for the first time since mid-August, indicating the moderately loose monetary policy will withdraw from the market gradually. Central bank’s move shows a clear sign of macro control with increasing expectations of inflation, since funds remain loose in the market, and it is not difficult for central bank to tighten the liquidity.

SMM predicts SHFE zinc prices will undergo corrections today, with prices expected to move in the RMB 21,200-21,600/mt range.

 

Copyright © SMM. All Rights Reserved

None of this material may be used for any commercial or public use in any forms or means, without the prior written consent of SMM. For reproduction issue, please contact us by email: service.en@smm.cn

Key Words:  Market movement  zinc price  zinc Zn 

SMM Morning Review - 2010/1/8 Zinc Market

SMM Insight 11:11:24AM Jan 08, 2010 Source:SMM

SHANGHAI, Jan. 8 (SMM) -- LME Market 

 
Close
(USD/mt)
Premium/Discount
Volume
(lot)
Position
(lot)
Inventory
(mt)
3-mth Contract
Spot – 3 mth
Dec. Average
2,413
-35
58,321
230,995
462,634
Jan. 7th
2,593
-32
69,451
227,935
490,100

SHFE Market

 
Zinc – Spot Month (RMB/mt)
RMB/USD
SHFE Close
Settlement
Weighted Ave.
Dec. 16th              
18,390
18,370
18,371
1:6.8280
Jan. 7th                
21,300
21,650
19,699
1:6.8276

 
Zinc – 3mth (RMB/mt)
Shanghai Spot
#0 Zinc Ingot
SHFE Close
Settlement
Weighted Ave.
Dec. 16th              
18,700
18,680
18,684
18,100
Jan. 7th                  
21,525
21,815
19,440
21,250

Summary

On Thursday, all major SHFE zinc contracts fluctuated widely, and first opened high and moved higher, but later plunged, with SHFE 1005 zinc contract even experiencing a fluctuation range of nearly RMB 2,000/mt, and SHFE three-month zinc prices closed down at RMB 21,725/mt. Transactions were very bullish, and positions declined significantly by nearly 15,000 lots, indicating the withdrawal of funds after profit-taking.

In spot markets, #0 zinc was traded at RMB 21,250/mt in Shanghai market, but offers were mixed, with offers for selected brands heard between RMB 21,300-21,500/mt, and with low interest in moving cargos. #1 zinc was traded at RMB 21,200/mt, and downstream consumers were cautious due to wild fluctuations in SHFE zinc prices, resulting in neutral trading sentiment.

As to macro policies, China's central bank surprised the market on Thursday by raising the auction yield of its three-month bills for the first time since mid-August, indicating the moderately loose monetary policy will withdraw from the market gradually. Central bank’s move shows a clear sign of macro control with increasing expectations of inflation, since funds remain loose in the market, and it is not difficult for central bank to tighten the liquidity.

SMM predicts SHFE zinc prices will undergo corrections today, with prices expected to move in the RMB 21,200-21,600/mt range.

 

Copyright © SMM. All Rights Reserved

None of this material may be used for any commercial or public use in any forms or means, without the prior written consent of SMM. For reproduction issue, please contact us by email: service.en@smm.cn

Key Words:  Market movement  zinc price  zinc Zn