SMM Zinc Market Morning Review (2014-3-6)

SHANGHAI, Mar. 6 (SMM) – LME zinc prices opened at USD 2,118/mt overnight, continuing to rise and touching a record over the past year at USD 2,143.5/mt. During European and US trading hours, Ukraine crisis improved, dragging down LME zinc prices back down. US ADP February employment data were 139,000, lower than expectations, with subitem index in non-manufacturing index falling. In this context, LME zinc prices rolled back early gains, and closing at USD 2,110/mt, down USD 9.5/mt or 0.45%. Trading volumes decreased by 4,647 lots to 14,384 lots, and total positions increased by 8,367 lots to 311,132 lots. LME zinc inventories fell to 751,975 mt.

SHFE 1405 zinc contract prices opened at RMB 15,285/mt on Wednesday evening. Dragged down by falling LME zinc prices, SHFE 1405 zinc contract prices inched down to RMB 15,250/mt as a large number of longs left the market, and finally closing at RMB 15,250/mt, down RMB 30/mt or 0.2%. Trading volumes decreased by 35,384 lots to 16,082 lots, and total positions increased by 1,072 lots to 124,624 lots.

Sluggish economic data from the US depressed market sentiment, and European Central Bank and Bank of England will decide their interest rate policy, with US initial jobless claims last week to be released today. LME zinc prices are expected to move between USD 2,090-2,125/mt today, and SHFE 1405 zinc contract prices will hover between RMB 15,180-15,280/mt, with spot discounts of RMB 250-290/mt against SHFE 1405 zinc contract prices.