SMM Zinc Market Morning Review (2014-6-24)

SHANGHAI, Jun. 24 (SMM) – HSBC's June PMI for China topped market expectations and hit a 7-month high, jumping above 50 for the first time this year. That shows a series of loosening monetary policies have begun to show result, and helping ease market concerns over China's soft demand. In this context, LME zinc prices strengthened, and touched USD 2,198/mt, a record high since February 18, but rolling back some early gains, and closing at USD 2,185.5/mt, up USD 9.5/mt or 0.44%. Trading volumes decreased by 1,382 lots to 7,866 lots, and total positions increased 2,871 lots to 300,000 lots.

SHFE 1409 zinc contract prices opened at RMB 15,810/mt on Monday evening, then touched a 15-month high of RMB 15,840/mt, but falling to RMB 15,760/mt later the day, and closing at RMB 15,765/mt, up RMB 5/mt or 0.03%. Trading volumes increased by 8,400 lots to 36,000 lots, and total positions increased by 4,386 lots to 130,000 lots.

The market is absorbing positive effects from HSBC's June PMI for China, which will give support to base metals prices. US May home sales and Federal Reserve Bank of Richmond's June manufacturing index will be released today. LME zinc prices will move between USD 2,180-2,200/mt today, and SHFE 1409 zinc contract prices will move between RMB 15,750-15,850/mt, with spot discounts between RMB 190-150/mt against SHFE 1408 zinc contract prices.