SMM Zinc Market Morning Review (2015-3-31)

SHANGHAI, Mar. 31 (SMM) – LME zinc prices opened at USD 2,082/mt Monday evening, and remained steady during Asian trading hours. During European and US trading session, LME zinc prices edged up and broke through USD 2,100/mt, reaching USD 2,110.5/mt, and closing at USD 2,108/mt, up USD 22/mt or 1.05%. Trading volumes were down 3,253 to 6,574 lots, and total positions decreased 2,164 to 287,564. LME zinc inventories fell 2,525 to 515,750 mt.

SHFE 1506 zinc contract prices opened at RMB 16,030/mt Monday evening, then rose to RMB 16,090/mt, and closed the day at RMB 16,065/mt, up RMB 90/mt or 0.56%. Trading volumes increased 20,296 to 46,392 lots, and total positions were up 1,732 to 123,690.

China lowered down payment for a second house buyers to 40%, and down payment for the first and second home purchase with accumulation fund loans was set at 20% and 30%. Sales of homes purchased over two years ago will be exempt from a tax of 5.6 percent on the current and original price gap, Chinese authorities said on Monday. Currently, sales of homes purchased over five years are exempt from the tax. This caused stocks and metal and rebar futures prices to surge, though these future prices fell back during night session.

US February home sales index was 106.9, its highest since June 2013. US February Consumer Price Index was 0.3%. Germany’s March CPI was up 0.3%, in line with market expectations. But Greece will run out of money April 20 if it fails to receive capital from its European allies. The US dollar index returned to an upward track on weakening euro.

European and US stocks mostly rose. COMEX crude oil prices plummeted. LME base metals prices diverged, with LME tin and nickel prices sluggish.

LME zinc prices are expected to move between USD 2,085-2,120/mt today. SHFE 1506 zinc contract prices will fluctuate between RMB 16,020-16,120/mt, with spot discounts of RMB 40-70/mt against SHFE 1505 zinc contract prices and RMB 60-90/mt against SHFE 1506 zinc contract prices.