SHANGHAI, Apr. 10 (SMM) – China's March CPI fell short of expectations. The low inflation rate helped ease market apprehensions that China will tighten monetary policies. In this context, China's stock markets were boosted, with the Shanghai Composite Index closing the day up 0.62%, driving up Asian stock markets and LME zinc prices. LME zinc prices overnight opened at USD 1,895/mt. As large numbers of shorts closed positions, LME zinc prices soared and broke through USD 1,900/mt, meeting resistance at the 10-day moving average and fluctuating briefly around USD 1,910/mt. UK February industry output and manufacturing output rose, with the growth higher than expected, helping ease risks that the country will be pushed to recession again in Q1 2013. The euro thus strengthened, and the euro against the US dollar closed the day up 0.4%. Besides, minute from the US Federal Reserve policy meeting that will be released this Thursday may signal it will maintain easing policies, which will push down the US dollar index. LME zinc prices thus soared to USD 1,926.5/mt, and closed at USD 1,923.5/mt, up USD 28.8/mt or 1.52%. Trading volumes increased by 908 lots to 7,015 lots, and total positions increased by 67 lots, to 271,000 lots. LME zinc inventories fell by 7,125 mt, to 1,141,725 mt.
LME zinc prices are expected to move between USD 1,915-1,935/mt today, and SHFE 1307 zinc contract prices should fluctuate between RMB 14,850-15,000/mt, with spot discounts between RMB 100-140/mt against SHFE 1306 zinc contract prices.
