SMM Morning Review - 2011/12/9 Zinc Market

SHANGHAI, Dec. 9 (SMM) – LME zinc prices overnight fluctuated around USD 2,030/mt after opening at USD 2,023.5/mt. European central bank announced it would cut interest rates, while European Central Bank President Mario Draghi hinted pessimism, allowing speculations that European central bank will take stimulus measures to fail. In this context, the US dollar index strengthened, pushing down base metal prices. LME zinc prices inched down to close at USD 1,998/mt, down USD 24.8/mt. Total position increased by 4,116 lots to 274,000 lots. LME inventories increased by 20,000 mt, to 758,000 mt. The market remains cautious ahead of the EU summit and since base metal prices closed with declines yesterday. SHFE three-month zinc contract prices should open lower and move between RMB 15,200-15,500/mt today, with spot discounts narrowing to negative RMB 0-100/mt.