SHANGHAI, Jan. 11 (SMM) -- SHFE zinc prices led domestic zinc and LME zinc prices declines for two consecutive days, and opened lower and went lower last Friday, with SHFE 1001, 1002 and 1003 zinc contracts even declining to the daily limits. SHFE 1004 zinc contract dipped to RMB 20,900/mt, but finally ended at RMB 21,210/mt, down 3.5%. Positions declined by more than 6,300 lots, with the turnover rate reaching 436% and trading value reaching over RMB 65.3 billion. Although SHFE zinc prices fell below RMB 21,000/mt, market players remained optimistic with regard to the support at RMB 20,000/mt. SHFE spot-month contract zinc prices stood firm at RMB 20,500/mt.
In zinc spot market, SMM offers for # zinc were RMB 20,650-20,750/mt, with market offers moving in the RMB 20,600-20,650/mt range. Offers were mixed in the morning, but inquiries were up. SHFE zinc prices improved in the afternoon, and market supply was limited, testing the psychological support and acceptance by consumers at RMB 20,500/mt. SHFE zinc inventories increased by 50 kt, indicating the application for reservoir capacity expansion of some warehouses has been approved by the Shanghai Futures Exchange. The sell-off pressure will increase, exerting resistance on the recovering zinc prices in the future.
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