SHANGHAI, Mar. 21 (SMM) – The US dollar index crept higher on the US Federal Reserve’s decision to continue tapering QE3. This caused LME zinc to hit a new low of USD 1,948.5/mt on Thursday after opening at USD 1,984.8/mt, closing the day USD 32.5/mt or 1.64% lower at USD 1,953/mt. Trading volumes were off 2,459 lots to 12,099 lots, and positions were also down 3,973 lots to 287,088 lots. Inventories dropped 3,550 mt to 785,350 mt.
SHFE 1406 zinc contract climbed to near the 5-day moving average after opening at RMB 14,720/mt on Thursday night, but then fell back to finish down RMB 10/mt or 0.07% at RMB 14,725/mt. Trading volumes plunged 31,802 lots to 19,972 lots, but positions added 2,722 lots to 76,494 lots.
A stronger greenback should leave LME zinc fluctuating between USD 1,940-1,965/mt on Friday. SHFE 1406 zinc contract should vacillate in a RMB 14,680-14,780/mt band, while spot zinc prices in Shanghai are expected at a discount of RMB 100-130/mt over the most active SHFE zinc contract.