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SMM Zinc Market Morning Review (2013-6-7)
Jun 7,2013 09:52CST
price review forecast
LME zinc prices overnight opened at USD 1,950/mt.

SHANGHAI, Jun. 7 (SMM) – LME zinc prices overnight opened at USD 1,950/mt. Asia-Pacific stocks markets mostly closed out the day with declines, dragging down zinc market sentiment. LME zinc prices fluctuated weakly around the 5-day moving average, moving between USD 1,935-1,950/mt. expectations that European central bank will further loosening policies failed, weighing down zinc prices. The sluggish US employment data triggered concerns over non-farm employment data due to be released today, with investors leaving the market after profit-taking, weighing down LME zinc prices to dip to USD 1,922/mt, and finally closing at USD 1,934/mt, down USD 1.73/mt or 0.88%. Trading volumes decreased by 1,451 lots, to 10,606 lots, and total positions increased by 1,080 lots, to 259,480 lots. LME zinc inventories grew by 5,000 mt, to 1,082,050 mt. But as market sentiment improves, LME zinc prices are expected to gain back some losses due to plummeting US dollar index.

The number of US initial jobless claims last week was 346,000, higher than the forecast of 345,000, with the weekly average of 348,000 in May, higher than 343,000 in April. The number of May US Challenger layoffs was 36,398, higher than the previous month. The number of US ADP employment in May released Wednesday was also below expectations. The sluggish data triggered market concerns of US non-farm employment data to be released today, pushing down the US dollar index and commodity prices.

Bank of UK announced it will maintain interest rate at 0.50% and quantitative easing at GBP 375 billion, in line with market expectations. European central bank decided to maintain its rate unchanged in June, also meeting market expectations. But Draghi gave no hint of further easing, so the central bank will unlikely implement negative interest rate in the near term. European central bank lowered its economic growth forecast in 2013 from a 0.5% decline to a shrink of 0.6% due to economic concerns, pushing down European stocks markets and dragging down base metals market confidence.

The US dollar index plunged by 1.25%, to 81, the lowest since late February; US stocks markets closed with gains, with the euro against the US dollar up 1.19%, touching 1.3303, a new high since late February; European stocks markets closed with declines, and Asia-Pacific stocks markets all dropped.

LME zinc prices will move between USD 1,920-1,950/mt today, and SHFE 1309 zinc contract prices should fluctuate between RMB 14,760-14,850/mt, with spot prices ranging from RMB 20/mt below or RMB 30/mt above SHFE 1309 zinc contract price.

LME zinc prices

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