SHANGHAI, Jun. 4 (SMM) – Last week was also the last trading week of May, so cargo holders were selling goods aggressively to increase cash flows. Downstream buying interest was low, however, leaving overall transactions muted.
Last week, spot zinc prices in Guangdong weakened, with prices of #0 zinc falling from RMB 40/mt below Shanghai prices to as low as RMB 50/mt below Shanghai prices. Growing zinc supply weighed down zinc prices, but downstream enterprises also purchased on an as-needed basis, keeping demand soft.
Last week, Zijin Mining restarted operations after completing maintenance, and will release goods into markets this week. #0 zinc prices in Tianjin were flat with Shanghai prices. Spot supply was tight, with supply of #0 zinc from Zijin Mining limited. Traders were holding prices firm, while downstream enterprises only purchased on an as-needed basis.
This week, spot zinc prices will remain weak. Tight month-end cash flows will improve slightly as the new month starts, and although spot supply is considered sufficient, downstream orders will begin to weaken as the summer season starts. In this scenario, spot zinc prices will weaken, with spot discounts against SHFE 1408 zinc contract prices expanding to RMB 50/mt.