SMM Morning Review - 2011/3/9 Zinc Market

SHANGHAI, Mar. 9 (SMM)--Since the market was gradually absorbing chaos in the Middle East, crude oil prices were down USD 42/bbl to close at USD 105.2/bbl, and the US stocks pared some losses to close with gains. The Dow Jones Industrial Average rose 124.35 to close at 12214.38, and the Nasdaq Composite Index was up 20.14 to close at 2,765.77. In this context, LME zinc prices closed at USD 2,395/mt, up USD 25/mt. But since LME zinc inventories continued to grow recent days, with inventories in New Orleans growing by 6,300 mt the day before yesterday, and inventories in Johore growing by 9,025 mt to 734,550 mt, which was the highest level since September 2004, LME zinc prices met resistance to rebound. Transactions overnight improved. Trading volumes increased by 6,000 lots to 50,008 lots, and total positions increased by 1,831 lots to 241,750 lots. SHFE three-month zinc contract prices are expected to struggle at RMB 18,000/mt level.

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