SMM Zinc Market Morning Review (2015-2-11)

SHANGHAI, Feb. 11 (SMM) – Major economic indicators released overnight were downbeat. China's CPI in January hit a five-year low, while PPI dropped for 35 months in a row, triggering concerns over China's commodity demand. Ongoing Greek crisis weighed on the euro, and the US dollar index also weighed down base metals. Growing crude oil inventories also depressed market sentiment. LME zinc prices opened at USD 2,155/mt, then edged down during European and US trading hours, giving back early week gains and closing at USD 2,115/mt, down USD 42.5/mt or 1.97%. Trading volumes were up 1,546 to 8,249 lots, and total positions increased 3,405 to 290,091. LME zinc inventories fell 4,150 to 608,000 mt.

SHFE 1504 zinc contract prices rose to RMB 16,300/mt Tuesday evening, which found support from RMB 16,200/mt, and closed at RMB 16,220/mt, down RMB 150/mt or 0.92%. Trading volumes were up 11,724 to 47,064 lots, and total positions increased 2,152 to 122,402.

LME zinc prices are expected to move between USD 2,105-2,135/mt. SHFE 1504 zinc contract prices will fluctuate between RMB 16,180-162,800/mt, with spot premiums of RMB 0-50/mt against SHFE 1504 zinc contract prices.