SHANGHAI, Feb. 8 (SMM) – In China's domestic markets, with LME zinc prices falling overnight, the most active SHFE 1305 zinc contract started down at RMB 15,935/mt Thursday. LME zinc prices were sent into the negative territory immediately following the opening. That, combined with strong short selling, dragged SHFE zinc prices down to an intraday low of RMB 15,830/mt before hovering narrowly around RMB 15,860/mt. SHFE 1305 zinc contract finished the day at RMB 15,840/mt, a drop of RMB 165/mt, with positions decreasing 13,448 lots to 151,662 lots.
In spot markets, as SHFE zinc prices marched down after opening down, discounts of #0 zinc against SHFE 1305 zinc contract shrank to RMB 330-360/mt, with traded prices largely between RMB 15,510-15,530/mt. Traded prices for #1 zinc were between RMB 15,470-15,480/mt. Spot zinc market activity became extremely quiet as the Chinese New Year holiday draws near, although speculators intended to move goods in the face of narrowing discounts. Downstream producers basically stayed away from markets. In the afternoon session, with SHFE zinc prices fluctuating in a narrow range, spot zinc discounts held between RMB 340-350/mt, while market transactions remained extraordinarily sluggish.