SMM Morning Review - 2010/1/21 Zinc Market-Shanghai Metals Market

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SMM Morning Review - 2010/1/21 Zinc Market

SMM Insight 09:53:40AM Jan 21, 2010 Source:SMM

SHANGHAI, Jan. 21 (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. 20th
2,445
-22.5
71,957
215,383
488,750

SHFE Market

 
Zinc – Spot Month (RMB/mt)
RMB/USD
SHFE Close
Settlement
Weighted Ave.
Jan. 18th              
20,190
20,065
20,069
1:6.8272
Jan. 20th                
20,400
20,545
20,383
1:6.8273

 
Zinc – 3mth (RMB/mt)
Shanghai Spot
#0 Zinc Ingot
SHFE Close
Settlement
Weighted Ave.
Jan. 18th              
20,550
20,415
20,415
19,955
Jan. 20th                  
20,795
20,935
20,675
20,350

Summary

On Wednesday, domestic stock and futures markets slumped due to rumors that Chinese government will tighten monetary policy, and SHFE zinc prices opened high but went lower. SHFE 1005 zinc contract prices closed at RMB 20,950/mt, with the lowest level at RMB 20,920/mt. Market player confidence was depressed by growing cash flow pressure, and the US dollar continued to advance, further increasing downward pressure on metals prices.

Spot transactions were also weak, and offers for #0 zinc around RMB 20,300/mt were heard in Shanghai market due to falling SHFE zinc prices in the morning, but later mainstream traded prices moved in the RMB 20,350-20,400/mt range, while traded prices for #1 zinc were in the RMB 20,300-20,350/mt range. Although smelters and traders were willing to move goods, the lower zinc prices and plunged stock markets dampened buying sentiment heavily.

Market rumors report that Chinese government will curb lending, and the US housing starts dropped by 4%, weaker than expected, indicating the demand from construction industry reported no improvement. As a result, the US dollar advanced sharply to 78.3, and metals prices fell in response. LME zinc prices closed at USD 2,445/mt, down 3.17%, with positions down 11,113 lots, and market confidence was eroded as well.

SMM predicts SHFE three-month contract zinc prices will fluctuate in the RMB 20,500-20,900/mt range today, and spot zinc prices will struggle at RMB 20,000/mt. Special attention should be paid to China’s macro economic data to be released at 10:00 this morning.

 

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 - 2010/1/21 Zinc Market

SMM Insight 09:53:40AM Jan 21, 2010 Source:SMM

SHANGHAI, Jan. 21 (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. 20th
2,445
-22.5
71,957
215,383
488,750

SHFE Market

 
Zinc – Spot Month (RMB/mt)
RMB/USD
SHFE Close
Settlement
Weighted Ave.
Jan. 18th              
20,190
20,065
20,069
1:6.8272
Jan. 20th                
20,400
20,545
20,383
1:6.8273

 
Zinc – 3mth (RMB/mt)
Shanghai Spot
#0 Zinc Ingot
SHFE Close
Settlement
Weighted Ave.
Jan. 18th              
20,550
20,415
20,415
19,955
Jan. 20th                  
20,795
20,935
20,675
20,350

Summary

On Wednesday, domestic stock and futures markets slumped due to rumors that Chinese government will tighten monetary policy, and SHFE zinc prices opened high but went lower. SHFE 1005 zinc contract prices closed at RMB 20,950/mt, with the lowest level at RMB 20,920/mt. Market player confidence was depressed by growing cash flow pressure, and the US dollar continued to advance, further increasing downward pressure on metals prices.

Spot transactions were also weak, and offers for #0 zinc around RMB 20,300/mt were heard in Shanghai market due to falling SHFE zinc prices in the morning, but later mainstream traded prices moved in the RMB 20,350-20,400/mt range, while traded prices for #1 zinc were in the RMB 20,300-20,350/mt range. Although smelters and traders were willing to move goods, the lower zinc prices and plunged stock markets dampened buying sentiment heavily.

Market rumors report that Chinese government will curb lending, and the US housing starts dropped by 4%, weaker than expected, indicating the demand from construction industry reported no improvement. As a result, the US dollar advanced sharply to 78.3, and metals prices fell in response. LME zinc prices closed at USD 2,445/mt, down 3.17%, with positions down 11,113 lots, and market confidence was eroded as well.

SMM predicts SHFE three-month contract zinc prices will fluctuate in the RMB 20,500-20,900/mt range today, and spot zinc prices will struggle at RMB 20,000/mt. Special attention should be paid to China’s macro economic data to be released at 10:00 this morning.

 

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