SHANGHAI, Mar. 26 -- Last week, SHFE three-month zinc contract prices were affected by both LME zinc prices and a weak Shanghai Composite Index, fluctuating between RMB 15,800-16,000/mt early in the week. On Thursday, SHFE three-month zinc contract prices fell below the 60-day moving average due to worse-than-expected PMI data from HSBC.
Despite the fact that SHFE zinc prices continued to fall, spot prices were stable between RMB 15,400-15,500/mt, and with discounts narrowing from RMB 300-350/mt early in the week, to RMB 220-230/mt. Arbitragers held goods with unfavorable discounts early in the week, and downstream buyers only purchased on an as-needed basis. Transactions improved due to dip-buying as discounts narrowed after declines in SHFE zinc prices.
Last week, spot inventories in East China grew by 10,000 mt to 486,400 mt, inventories in South China fell 3,100 mt to 128,000 mt, and inventories in