SMM Morning Review - 2011/8/17 Zinc Market

SHANGHAI, Aug. 17 (SMM)--LME zinc prices overnight surged in the morning trading and slumped to USD 2,150-2,160/mt as of the midday. The weakened GDP in Germany and Euro zone disappointed the market, with the GDP for the second quarter up 0.2% and 0.1% in Euro zone and Germany respectively, both worse than forecasts. As a result, LME zinc prices overnight continued fluctuating at low levels. US housing starts in July dropped 1.5% to an annual rate of 604,000 units, better than the forecast, causing LME zinc prices to gain back some losses to close at USD 2,179/mt, down USD 15/mt. SHFE three-month zinc contract prices should rally to move between RMB 16,650-16,950/mt today, with spot discounts remaining low at negative RMB 100-200/mt.