SHANGHAI, Jan. 12 (SMM) -- SHFE zinc prices outperformed LME zinc prices, but were restricted by selling pressure after opening high. SHFE three-month contract zinc prices dipped to RMB 21,350/mt, but later fluctuated above daily moving averages supported by the entrance of buyers at lower prices when LME zinc prices recovered, with struggles between long and short positions remaining intense. Positions of SHFE 1004 zinc contract declined by 4,942 lots, with the turnover rate of 275%. SHFE 1004 zinc contract faced stronger selling pressure at RMB 21,800/mt, but positions of SHFE 1005 zinc contract began increasing, with positions up 6,532 lots yesterday. SHFE 1005 zinc contract closed at RMB 21,920/mt, up over 2%. SHFE spot-month contract zinc prices received solid support above RMB 21,000/mt.
In the zinc spot market, SMM offers for #0 zinc were RMB 20,800-20,900/mt, and traded prices headed for RMB 21,000/mt in the market. Transactions were weak in the morning, with mixed views existing in the market. However, both SHFE and LME zinc prices stabilized, smelters kept their offers firm, and they remained optimistic toward future zinc prices, greatly ease the panic market sentiment, and zinc prices also showed signs of steady rises due mainly to improving confidence of long players. Zinc prices may move higher steadily after short-term fluctuations.
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