SHANGHAI, Apr. 22 (SMM) – Zinc prices have been falling since late February. Will zinc prices rally? According to a recent SMM survey, 40% of the 40 enterprises surveyed are neutral toward zinc price trends, and 40% see zinc price falling, while only 20% believe zinc prices will improve.
The pessimistic market players believe domestic and overseas negative news will continue to depress investor optimism. Cyprus’plan to sell gold reserves pushed down gold prices, with investors pessimistic and commodity markets sluggish. Besides, mixed economic data from Europe and US is testing the market, and no positive news will come to boost zinc price in the short term. In addition, base metal prices will not improve given the high US dollar index.
The optimistic market players are expecting consumption will drive zinc prices in the traditional high demand period for zinc. LME zinc inventories had fallen from 1.20 million mt, to 1.12 million mt, while SHFE zinc inventories also fell by about 20,000 mt, which is a reflection of improving demand.
The neutral market players believe smelters holding back goods due to cost restrictions will give support to zinc prices. But uncertainties from news will dominate zinc price trends, with spot zinc prices expected to hover between RMB 14,000-14,500/mt in the near term.