SHANGHAI, Jun. 4 (SMM) – LME zinc prices overnight opened at USD 1,925/mt due to the upbeat China's official May PMI released last Saturday, and soared briefly after opening. But dragged down by China's sluggish data, LME zinc prices fell back to USD 1,920/mt. Mounting long momentum pushed up nickel prices to USD 1,945/mt. UK's PMI in May rose above 50, and PMI in the euro zone, Germany, France and Italy also improved to hit record highs, but remained below 50, rarely supporting zinc prices. But the downbeat US data helped ease concerns that the US Federal Reserve will back off Quantitative Easing, so the US dollar index was sold and plummeted below 83, a retreat of 0.73%, and non-US dollar currencies soared, giving support to zinc prices, finally closing at USD 1,946/mt, up USD 23.7/mt, or 1.24%. Trading volumes increased by 5,880 lots, to 17,660 lots, and total positions decreased by 1,486 lots, to 259,907 lots. LME zinc inventories fell by 475 mt, to 1,086,350 mt.

The US dollar index plunged 0.73%, hitting a 4-week low; US stocks markets advanced, with the Dow Jones Industrial Average up 0.92%; European stocks markets plummeted. The euro against the US dollar returned to 1.31, closing with gains of 0.62%; Asian stocks markets mostly dropped; LME base metals prices rose across the board.

LME zinc prices will move between USD 1,930-1,960/mt today, and SHFE 1309 zinc contract prices should fluctuate between RMB 14,900-15,000/mt, with spot prices RMB 50-0/mt below SHFE 1309 zinc contract price.