SHANGHAI, Feb. 6 (SMM) -- SHFE three-month zinc contract prices climbed to near RMB 16,000/mt due to entrance of long investors after fluctuating between RMB 15,800-15,850/mt briefly in the morning session, but later prices faced strong short selling pressures at RMB 16,000/mt, and prices mainly struggling around RMB 16,000/mt in the midday. Long buying again pushed up SHFE zinc prices in the afternoon session, with prices even hitting RMB 16,065/mt. As most short investors exited the market after profit-taking at the end of trading, SHFE three-month zinc contract prices lost previous gains and finally closed at RMB 15,955/mt, up RMB 80/mt. Trading volumes fell by 40,000 lots to 232,962 lots, while positions decreased by 3,586 lots to 163,972 lots.

In the spot market, as SHFE three-month zinc contract prices climbed to near RMB 16,000/mt, domestic #0 zinc was traded at discounts between RMB 320-350/mt over SHFE three-month zinc contract prices, between RMB 15,600-15,650/mt. Imported zinc was quoted at discounts of RMB 420-450/mt, while quotations for #1 zinc were flat with imported zinc. Widening discounts improved trader interest in arbitrage activity, and most deals in the spot market were made by traders, with downstream buying very limited.