SHANGHAI, July 2 (SMM) -- Yesterday, LME zinc prices opened at USD 1,771/mt, with the highest level and lowest level at USD 1,793/mt and USD 1,737/mt, respectively, and finally prices ended at USD 1,748.8/mt.
The China Federation of Logistics and Purchasing (CFLP) revealed yesterday that the Purchasing Managers' Index (PMI) for China's manufacturing sector stood at 52.1 in June, lower than May levels of 53.9, triggering market concerns over the economic recovery in the future. The reading of June PMI is mixed. The purchasing price index has fallen significantly for two consecutive months, showing the producer price index in June may fall, which help erode market expectations of inflation and interest rate hikes. However, overseas demand is shrinking. New export order index fell by 2.1 percentage points from May levels, and although major countries' measures to cut budget deficit will not take effect immediately, these measures will exert persistent pressure on China's export markets. The US economic data released last night was negative as well. The US Department of Labor announced that initial claims for jobless benefits rose to 472,000 in the week ended June 26th, higher than the forecast of 452,000, also spurring market concerns over the US employment data set for release on Friday.
SHFE zinc prices fell at a slower pace compared with LME zinc prices recently. Positions and trading volumes of SHFE 1010 zinc contract show signs of falling, an indication of growing wait-and-see sentiment and a possible technical rebound in SHFE zinc prices in the near term. However, pessimistic economic environment and negative economic data depress market confidence, limiting any upward momentum in SHFE zinc prices.
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