SMM Zinc Market Morning Review (2015-4-2)

SHANGHAI, Apr. 2 (SMM) – Economic indicators released yesterday were mixed. China’s official PMI in March rebounded, helping improve market sentiment. LME zinc prices opened at USD 2,078/mt, and rose to test USD 2,100/mt. ADP’s employment for the US fell short of market expectations, weighing on the US dollar index. LME zinc prices slumped at one point, dipping to USD 2,064/mt then rebounded and closed at USD 2,100/mt, up USD 19.5/mt. Trading volumes were down 329 to 9,449 lots, and total positions increased 355 to 289,911. LME zinc inventories fell 2,500 to 510,625 mt.

SHFE 1506 zinc contract prices opened at RMB 15,925/mt Wednesday evening, then inched up to RMB 16,030/mt, and closed the day at RMB 16,025/mt, up RMB 70/mt or 0.44%.

189,000 jobs were added in the US private sector in March, falling far short of the 225,000 expected, boding ill for US non-farm employment data scheduled for release this Friday. ISM’s March manufacturing PMI in March was 51.5, lower than the 52.5 expected and February’s 52.9. European major economic indicators, however, were upbeat, which is believed to be the result of quantitative easing. European March Manufacturing PMI was 52.2, its highest over the past 10 months. Germany’s March manufacturing PMI was 52.8, hitting an 11-month high. Manufacturing indicators from Spain and Italy were also positive.

China’s March manufacturing PMI rebounded. New home prices in China’s 100 cities averaged RMB 10,523/㎡, down 0.15% MoM, with YoY growth expanding to 4.35%.

US stocks mostly dropped while European stocks increased. The US dollar index plummeted 0.25% and COMEX crude oil prices surged 5.23%. LME base metals prices followed their own trends.

LME zinc prices are expected to move between USD 2,070-2,100/mt today. SHFE 1506 zinc contract prices will fluctuate between RMB 15,950-16,050/mt, with spot discounts of RMB 130-100/mt against SHFE 1506 zinc contract prices.