SHANGHAI, Jul. 15 (SMM) – LME zinc prices last Friday opened at USD 1,903/mt, and continued to fall to USD 1,880/mt during Asian trading hours. Positive earnings reports of JP Morgan and Wells Fargo boosted US stocks to close the day with gains, pushing up LME zinc prices to rebound. But as the US dollar index rebounded after plunging for two consecutive days, LME zinc prices met resistance at USD 1,900/mt, and finally closed at USD 1,895.3/mt, down USD 3/mt or 0.61%. Trading volumes decreased by 7,898 lots, to 6,365 lots, and total positions decreased by 412 lots, to 260,843 lots. LME zinc inventories fell by 5,725 mt, to 1,008,500 mt. China's June sales data, industry production and Q2 real GDP to be released today are pessimistic, which will enhance resistance at USD 1,900/mt for LME zinc prices.
The financial market lacked news overnight. University of Michigan's July CCI was 83.9, worse than 84.1 expected; Federal Reserve Bank of Philadelphia President Charles Plosser and St Louis Fed Chairman Bullard stated. Charles Plosser expressed the US Federal Reserve (Fed) should begin to scale back bond purchasing in September, and quit bond purchasing at the end of the year, while Bullard believes the Fed needs more easing policies given sliding inflation data.
Fitch downgraded France's rating from AAA to AA+ as the country's economic recovery is worse than expected, and maintained its outlook steady because France will not negatively affect European debt crisis. This weighed down the euro.
China's economic data released last weekend including June power generation volume, M2 growth and newly-increased loans were not optimistic. Finance Minister Lou Jiwei expressed China is able to achieve the 6.5% or 7% economic growth target, triggering concerns over China's Q2 GDP.
US stocks markets continued to rise while European stocks fell; LME base metals prices were mixed.
LME zinc prices will move between USD 1,870-1,900/mt today, and SHFE 1310 zinc contract prices should fluctuate between RMB 14,600-14,720/mt, with spot premiums against SHFE 1309 zinc contract prices between RMB 70-100/mt.