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SMM Zinc Market Morning Review (2013-7-18)
Jul 18,2013 09:42CST
price review forecast
Source:SMM
LME zinc prices overnight opened at USD 1,890/mt, and then struggled around the level during the day.

SHANGHAI, Jul. 18 (SMM) – LME zinc prices overnight opened at USD 1,890/mt, and then struggled around the level during the day. China's Finance Minister Lou Jiwei spoke in Washington July 11, stating that China will not push massive financial stimulus policies this year, and only adjust policies slightly to boost economic growth and job market with the precondition that financial deficit remains unchanged. This caused market concerns over China's zinc demand to grow. The US dollar index strengthened and challenged the 60-day moving average, pushing down LME zinc prices below all moving averages, dipping to USD  1,854.5/mt, and finally closing at USD 1,860.3/mt, down USD 29.8/mt, or 1.57%. Trading volumes increased by 4,789 lots, to 10,303 lots, and total positions decreased by 6,661 lots, to 249,458 lots. LME zinc inventories grew by 75,900 mt, to 1,077,225 mt.

The market overnight was focused on US Federal Reserve Chairman Ben Bernanke's testimony before the House Financial Services Committee. He defended for easing policies again, and insisted that the Fed will likely stop bond purchasing plan in mid-2014, with unemployment rate around 7% by then, but emphasized monetary policies will also depend on economic data. The Fed released its Beige Book saying US economy continued to grow mildly during June and early July, and manufacturing activities in most US regions continued to expand, with manufacturing orders, sales or output increasing. That triggered market concerns that the Fed will scale back asset purchasing at anytime, pushing up the US dollar index to close up 0.23%, and weighing down base metals prices. Bernanke will continue to testify before the Senate today.

Bank of UK's meeting minutes show the bank will maintain current assets purchasing scale by a 9-0 voting. Mark Carney's also supported to maintain existing policies unchanged and opposed to expand easing policies, causing market concerns that England will further loosen its monetary policies to decrease.

China's Finance Minister Lou Jiwei spoke in Washington July 11, stating that China will not push massive financial stimulus policies this year, and only adjust policies slightly to boost economic growth and job market with the precondition that financial deficit remains unchanged.

European and US stocks closed with gains, refraining base metals declines; Asian-Pacific stocks were mixed; LME base metals prices closed with declines except for tin and nickel.

LME zinc prices will move between USD 1,840-1,875/mt today, and SHFE 1310 zinc contract prices should fluctuate between RMB 14,520-14,620/mt, with spot premiums against SHFE 1309 zinc contract prices expanding to RMB 80-120/mt.

 

LME zinc prices

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