SMM Zinc Market Daily Review (2013-3-13)

SHANGHAI, Mar. 14 (SMM) - SHFE 1306 zinc contract prices opened at RMB 15,275/mt, standing above the 5-day moving average. Due to the news that the State Reserve will build zinc reserves, SHFE zinc prices only dropped by RMB 15,240/mt in the morning trading, and then climbed to RMB 15,330/mt, despite the Shanghai Composite fell immediately following opening. In the afternoon, SHFE 1306 zinc contract prices generally fluctuated between RMB 15,280-15,310/mt in the afternoon, and finally closed at RMB 15,290/mt, up RMB 75/mt, or 0.72%. Total position decreased by 3,138 lots to 122,866 lots.

SHFE three-month zinc contract prices opened slightly higher and then inched up today. Discounts of #0 zinc against SHFE 1305 zinc contract prices were to RMB 190-210/mt, with traded prices between RMB 14,980-15,010/mt. #1 zinc prices were RMB 14,960-14,980/mt. SMM sources report the State Reserve Bureau plans to build 50,000 mt of zinc ingot reserves, and will invite bidding this Friday. The market took a wait-and-see attitude. Smelters continued to hold goods, while downstream buying interest was weak, keeping overall transactions quiet.