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SMM Zinc Market Daily Review (2014-8-12)
Aug 13, 2014 09:24CST
Source:SMM
SHFE 1410 zinc contract prices opened higher at RMB 16,725/mt Monday evening, but dipped to RMB 16,625/mt due to selling pressure, and closing at RMB 16,630/mt, down RMB 25/mt or 0.15%.

SHANGHAI, Aug. 13 (SMM) – SHFE 1410 zinc contract prices opened higher at RMB 16,725/mt Monday evening, but dipped to RMB 16,625/mt due to selling pressure, and closing at RMB 16,630/mt, down RMB 25/mt or 0.15%. Trading volumes decreased by 18,346 to 177,850 lots, and total positions grew by 7,116 to 239,540 lots. SHFE 1410 zinc contract prices opened at RMB 16,630/mt on Tuesday, falling to a three-week low of RMB 16,560/mt in the morning, dragged down by falling LME zinc prices. But since a large number of longs rushed to the market, SHFE 1410 zinc contract prices clawed back early gains and touched RMB 16,815/mt, and closing at RMB 16,760/mt, up RMB 105/mt or 0.63%. Trading volumes increased by 152,826 lots, to 633,080 lots, and total positions increased by 36,198 lots to 268,622 lots. SHFE 1410 zinc contract prices are expected to test the 5 and 10-day moving average due to the entrance of longs and since LME zinc prices edged higher during European trading hours.

#0 zinc prices were between RMB 16,600-16,650/mt, with spot prices RMB 10-40/mt above SHFE 1410 zinc contract prices. #1 zinc prices were between RMB 16,590-16,610/mt. SHFE 1410 zinc contract prices bottomed and rallied to RMB 16,620-16,630/mt, with spot premiums between RMB 10-40/mt. The price spread between Shanghai and Guangdong expanded to RMB 100/mt, attracting some investors to sell in Shanghai whilst buying in Guangdong. Expanding spot premiums combined with the nearing of delivery date allowed cargo holders to sell actively, leading to sufficient supply. Purchases are mainly for long-term contract delivery and from downstream buyers, and speculators purchased at lower prices, causing transactions to improve. Shuangyan branded #0 zinc prices were RMB 16,620-16,650/mt, with RMB 16,600-16,630/mt for Yuguang, Qinxin, Qilin, Tiefeng and Jiulong zinc. AZ #0 zinc was traded between RMB 16,590-16,620/mt. SHFE 1410 zinc contract prices surged to RMB 16,815/mt in the afternoon, with spot premiums inverting to discounts of RMB 50/mt against SHFE 1410 zinc contract prices, leaving cargo holders and speculators both cautious.
 

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