SHANGHAI, Feb. 18 (SMM) –SHFE zinc prices rose on Monday to RMB 16,255/mt, following the lead of LME zinc prices, but as investors exited markets before the Chinese New Year holiday and due to a correction in Chinese A-shares, SHFE zinc prices fell to RMB 15,800-15,900/mt, with resistance at the 10-day moving average.
Spot discounts over the most active SHFE zinc contract price narrow during the past week from RMB 400-420/mt to RMB 350-370/mt in response to falling SHFE zinc prices, which then encouraged arbitrage traders to sell goods. Purchases, however, were rare as buyers stayed out of the market ahead of the holiday. Most smelters sold goods actively, but a majority of downstream enterprises have already halted operation or had completed stock building early in the week, leaving zinc demand weak and trading thin.
The SHFE will be closed next week for the Chinese New Year holiday, so SHFE zinc prices will meet resistance at the 10-day moving average.