SMM Zinc Market Morning Review (2014-1-17)

SHANGHAI, Jan. 17 (SMM) – LME zinc prices overnight opened slightly lower at USD 2,080.3/mt, and then hovered between USD 2,080-2,090/mt. Euro zone and US December inflation data were mild. LME zinc prices rose initially before falling, rising to USD 2,097/mt at one point, and meeting resistance at USD 2,100/mt, then dropping to USD 2,065/mt, finally closing at USD 2,071.8/mt, down USD 10.5/mt or 0.5%. Trading volumes decreased by 299 lots to 9,711 lots, and total positions increased by 1,108 lots to 309,899 lots. LME zinc inventories fell by 4,250 mt to 888,050 mt.

SHFE 1404 zinc contract prices overnight opened at RMB 15,275/mt, then edged up to touch RMB 15,325/mt. LME zinc prices plunged during US trading hours, but SHFE 1403 zinc contract prices held firm, and closed at RMB 15,270/mt, up RMB 40/mt or 0.26%. Trading volumes increased by 5,470 lots, to 17,510 lots, and total positions increased by 1,852 lots to 94,206 lots.

LME zinc prices are expected to move between USD 2,055-2,085/mt, and SHFE 1404 zinc contract prices will hover between RMB 15,170-15,300/mt, with spot discounts of RMB 80-130/mt against SHFE 1404 zinc contract prices.