SMM Zinc Market Daily Review (2014-10-22)

SHANGHAI, Oct. 23 (SMM) – SHFE 1412 zinc contract prices opened at RMB 16,250/mt Tuesday evening, then edged up with LME zinc prices, touching as high as RMB 16,380/mt, and closed at RMB 16,360/mt, up RMB 150/mt or 0.93%. Trading volumes increased 14,360 to 234,700 lots, and total positions increased 142 to 142,072 lots. SHFE 1412 zinc contract prices opened at RMB 16,355/mt October 22, then rolled back some gains due to the exodus of longs, then hovered between RMB 16,300-16,340/mt. LME zinc prices leapt before the end of trading, but SHFE 1412 zinc contract price gains were extremely limited, and closed at RMB 16,355/mt, up RMB 145/mt or 0.89%. Trading volumes decreased 35,380, to 346,806 lots, and total positions were down 9,110 lots to 132,820 lots. SHFE 1412 zinc contract prices are expected to rebound.

#0 zinc prices were between RMB 16,620-16,660/mt, with spot premiums of RMB 320-350/mt against SHFE 1412 zinc contract prices. #1 zinc prices were between RMB 16,570-16,600/mt, with the price spread between #1 and #0 zinc narrowing to RMB 50-60/mt. SHFE 1412 zinc contract prices fell to RMB 16,310/mt after opening, but were still up RMB 70-80/mt from the previous trading day. Smelters increased sales selling on falling prices, but #0 zinc supply was limited. This allowed cargo holders to hold prices firm, quoting Shuangyan zinc prices as high as RMB 360/mt above SHFE 1412 zinc contract prices. But large inflows of imported zinc helped ease supply tightness, with Belgian #0 zinc prices between RMB 16,620-16,630/mt. Investors were unwilling to purchase on high premiums. Shuangyan branded #0 zinc prices were RMB 16,640-16,660/mt, and prices for Yuguang and Hongda zinc were RMB 16,630-16,650/mt. Baiyin, Qilin, and Jiulong zinc prices were RMB 16,630-16,640/mt. SHFE 1412 zinc contract prices consolidated in the afternoon, with trading muted.