SHANGHAI, Apr. 3 (SMM) - SHFE 1306 zinc contract opened at RMB 14,650/mt on Tuesday. After its opening, the contract rose to RMB 14,695/mt, buoyed by rising LME zinc prices and Shanghai Composite Index. Later, the Shanghai Composite Index dived to a new low for the year at 2,220.44 points as investors are watching from the sidelines ahead of the Chinese Qingming holiday, closing down 0.3%. Stagnant LME zinc prices kept investors wary of buying SHFE zinc contracts at lows, keeping the most active SHFE zinc contract within RMB 14,650-14,680/mt during the day. Finally, SHFE 1306 zinc contract closed RMB 45/mt or 0.31% higher at RMB 14,685/mt. As for SHFE 1306 zinc contracts, trading volumes decreased 6,296 lots to 21,156 lots, while positions also shrank 5,004 lots to 110,218 lots. As regards SHFE 1307 zinc contracts, trading volumes contracted 11,470 lots to 52,970 lots, while positions increased 2,376 lots to 110,082 lots.
SHFE 1306 zinc contract fell back after initial rises on Tuesday. #0 zinc was traded at RMB 14,570-14,590/mt, a discounts of RMB 80-100/mt over SHFE 1306 zinc contract prices. Mainstream traded prices for #1 zinc were RMB 14,540-14,560/mt, and its price spread with #0 zinc narrowed due to tight supplies. Zinc smelters refrained from selling at lows and are planning to cut or suspend production since zinc prices are far below costs. Traders were testing the water and in no hurry to buy. Downstream producers mostly purchased as needed due to poor orders and out of growing bearishness over future prices. This left trading unimproved from yesterday.