SMM Morning Review - 2012/9/18 Zinc Market

Shanghai, Sept. 18 (SMM) -- Weighed by strong performance of the US dollar, LME zinc prices fell during the Asian trading hours and later fluctuated narrowly between USD 2,080-2,100/mt. During the European and the US trading hours, the yields of Spanish government bond rose to break through 6%. Coupled with decline in New York manufacture activity index for September, LME zinc prices fell to hit an intraday low at USD 2,073/mt. Later, LME zinc prices promptly rebounded to regain some losses, and finally closed at USD 2,085/mt, down USD 25/mt or 1.18% from a day earlier.

The waning positive impact from QE3 and weak performance of China’s stock market may weigh on LME zinc prices to move in the USD 2,070-2,100/mt on Tuesday. The most active SHFE zinc contract price shall fall to the RMB 15,650-15,800/mt range. Downstream buying interest will be low, which may leave spot discount between RMB 300-330/mt.