SMM Zinc Market Morning Review (2013-6-19)-Shanghai Metals Market

Hot Keywords

  • Inventory data
  • NPI
  • Zinc
  • Production data
  • Market commentary
  • Macroeconomics
  • Morning comments
  • Aluminium
  • Copper
  • Stainless steel
  • Mengtai Group
  • hydrogen stations
  • Nickel
  • Iron ore
  • trade negotiations

SMM Zinc Market Morning Review (2013-6-19)

Price Review & Forecast 09:59:45AM Jun 19, 2013 Source:SMM

SHANGHAI, Jun. 19 (SMM) – LME zinc prices overnight opened at USD 1,861.3/mt. The NBS reported newly-built home prices in 65 of 70 medium and large cities rose in May, fewer than April, and stated China should maintain strict regulations to the property market, depressing base metal demand and pushing down LME zinc prices after touching USD 14,870/mt. US economic data was also sluggish, with housing data in May falling short of expectations, dragging down LME zinc prices to USD 1,844.3/mt, but gaining back some losses and finally closing at USD 1,857.5/mt, down USD 6.3/mt or 0.34%. Trading volumes increased by 1,348 lots, to 7,891 lots, and total positions decreased by 8,889 lots, to 261,296 lots. LME zinc inventories fell by 2,200 mt, to 1,081,575 mt.

US Commerce Department reported June 18 that US housing starts in May increased by 914,000 units, with the largest growth in multi-family home starts, but increases were still below expectations. US May construction permits were 974,000 units, compared to the forecast of 975,000, and 1.005 million units in April, with a drop of 3.1% in May and an increase of 12.9% in April. US Commerce Department also showed that US May CPI only rose slightly from the previous month, implying US inflationary pressure is modest while global economic growth and US salary increases slow. As ICSC/Goldman Sachs Chain Store Sales for the week ending June 15 was up 0.3% from the previous week, US economic recovery is expected to continue in the short term.

Germany's ZEW economic sentiment index in June rose to 38.5, with the growth better than expectations, and ZEW June economic sentiment index climbed to 30.6, compared to 27.6 in the previous month. German ZEW President Clemens Fuest stated Germany's economy will grow faster in 2H 2013, with major driving force of private consumption, positive job situations and salary growth. Besides, G8 prompted euro zone countries to build a bank union at the meeting in Northern Ireland, which will positively affect the market in the near term.

State Administration of Foreign Exchange (SAFE) revised current account surplus in Q1 to USD 47.6 billion on June 18, compared to the initial USD 55.2 billion, and revised capital and financial account surplus in Q1 to USD 90.1 billion, compared to the initial USD 101.8 billion. Besides, hot money began to flow out of China, and foreign exchange receipts continued to decrease. Although China can ease liquidity tightness by reverse repurchasing and Short-term Liquidity Operations, market expectations that China will lower deposit reserve ratio increase.

LME base metals prices mostly dropped, with copper prices falling by 1.37%; the US dollar index rose by 0.08%; LIFFE gold prices fell by 1.25%. The Dow Jones Industrial Average rose by 0.91%.

LME zinc prices will move between USD 1,845-1,875/mt today, and SHFE 1309 zinc contract prices should fluctuate between RMB 14,480-14,580/mt, with spot premiums against SHFE 1309 zinc contract prices narrowing to RMB 80-130/mt.

 

Key Words:  LME zinc prices  

SMM Zinc Market Morning Review (2013-6-19)

Price Review & Forecast 09:59:45AM Jun 19, 2013 Source:SMM

SHANGHAI, Jun. 19 (SMM) – LME zinc prices overnight opened at USD 1,861.3/mt. The NBS reported newly-built home prices in 65 of 70 medium and large cities rose in May, fewer than April, and stated China should maintain strict regulations to the property market, depressing base metal demand and pushing down LME zinc prices after touching USD 14,870/mt. US economic data was also sluggish, with housing data in May falling short of expectations, dragging down LME zinc prices to USD 1,844.3/mt, but gaining back some losses and finally closing at USD 1,857.5/mt, down USD 6.3/mt or 0.34%. Trading volumes increased by 1,348 lots, to 7,891 lots, and total positions decreased by 8,889 lots, to 261,296 lots. LME zinc inventories fell by 2,200 mt, to 1,081,575 mt.

US Commerce Department reported June 18 that US housing starts in May increased by 914,000 units, with the largest growth in multi-family home starts, but increases were still below expectations. US May construction permits were 974,000 units, compared to the forecast of 975,000, and 1.005 million units in April, with a drop of 3.1% in May and an increase of 12.9% in April. US Commerce Department also showed that US May CPI only rose slightly from the previous month, implying US inflationary pressure is modest while global economic growth and US salary increases slow. As ICSC/Goldman Sachs Chain Store Sales for the week ending June 15 was up 0.3% from the previous week, US economic recovery is expected to continue in the short term.

Germany's ZEW economic sentiment index in June rose to 38.5, with the growth better than expectations, and ZEW June economic sentiment index climbed to 30.6, compared to 27.6 in the previous month. German ZEW President Clemens Fuest stated Germany's economy will grow faster in 2H 2013, with major driving force of private consumption, positive job situations and salary growth. Besides, G8 prompted euro zone countries to build a bank union at the meeting in Northern Ireland, which will positively affect the market in the near term.

State Administration of Foreign Exchange (SAFE) revised current account surplus in Q1 to USD 47.6 billion on June 18, compared to the initial USD 55.2 billion, and revised capital and financial account surplus in Q1 to USD 90.1 billion, compared to the initial USD 101.8 billion. Besides, hot money began to flow out of China, and foreign exchange receipts continued to decrease. Although China can ease liquidity tightness by reverse repurchasing and Short-term Liquidity Operations, market expectations that China will lower deposit reserve ratio increase.

LME base metals prices mostly dropped, with copper prices falling by 1.37%; the US dollar index rose by 0.08%; LIFFE gold prices fell by 1.25%. The Dow Jones Industrial Average rose by 0.91%.

LME zinc prices will move between USD 1,845-1,875/mt today, and SHFE 1309 zinc contract prices should fluctuate between RMB 14,480-14,580/mt, with spot premiums against SHFE 1309 zinc contract prices narrowing to RMB 80-130/mt.

 

Key Words:  LME zinc prices