SHANGHAI, Mar. 19 (SMM) – The euro zone agreed on Saturday to aid Cyprus worth 10 billion euros, but required the country’s savers to pay up to 10 percent on their deposits, shaking investors’ confidence. The rising dollar in earlier session also weighed down LME zinc market. After opening USD 1,950/mt overnight, LME zinc drifted lower with growing selling pressures, attempting to find support at USD 1,925/mt. As economic data both from the US and Europe was disappointing, LME zinc market dropped further at the tail of trading, down to USD 1,912/mt, a new low in 4 months, and finally closed at USD 1,920.8/mt, down USD 38/mt, or a drop of 1.94%. Transactions were up 5,025 lots to 14,348 lots, while positions were up 2,074 lots to 264,082 lots. LME zinc inventories were up 575 mt to 1,205,125 mt.
The dollar, opening high today, will continue to dampen the zinc market. Special attention should be paid to the vote in Cyprus and the data to be released in the US and Europe. SMM expects LME zinc to move between USD 1,905-1,935/mt, and SHFE 1306 zinc prices, the most actively traded contract, will hover in the RMB 14,790-14,950/mt on Tuesday, with spot discounts between RMB 150-190/mt.