SMM Zinc Market Morning Review (2015-1-22)

SHANGHAI, Jan. 22 (SMM) – It was reported European Central Bank will announce quantitative easing and buy EUR 50 billion in government bonds each month. This is expected to boost investment in the construction sector. In addition, US December housing starts hit a 7-year high, pushing up European and US stocks. LME zinc prices opened at USD 2,113/mt, then inched down to RMB 2,085/mt, and soared again to USD 2,139/mt, closing at USD 2,131/mt, up USD 26/mt or 1.24%. Trading volumes were up 1,545 to 9,538 lots, and total positions decreased over 10,000 to over 289,000. LME zinc inventories fell 100 to 652,675 mt.

SHFE 1503 zinc contract prices opened at RMB 16,120/mt Wednesday evening, then rose to the 20-day moving average, and closing at RMB 16,310/mt, up RMB 185/mt or 1.15%. Trading volumes were up 74,554 to 138,918 lots, and total positions increased 2,704 to 159,222.

LME zinc prices are expected to move between USD 2,125-2,155/mt. SHFE 1503 zinc contract prices will fluctuate between RMB 16,300-16,400/mt, with spot premiums between RMB 150-200/mt against SHFE 1503 zinc contract prices.