SMM Zinc Market Morning Review (2015-4-22)

SHANGHAI, Apr. 22 (SMM) – Base metals prices followed their own trends overnight, with zinc outperforming other base metals. LME zinc prices opened at USD 2,181/mt, then fluctuated around USD 2,185/mt. During European and US trading hours, LME zinc prices dipped to USD 2,180/mt, then rallied to USD 2,200/mt, and closed at USD 2,210.5/mt, up USD 21/mt or 0.96%. Trading volumes were up 3,974 to 76,319 lots, and total positions decreased 1,001 to 299,184. LME zinc inventories fell 2,675 to 489,900 mt.

SHFE 1506 zinc contract prices opened at RMB 16,440/mt, then touched RMB 16,500/mt, and closed the day at RMB 16,525/mt, up RMB 100/mt or 0.61%.

The market lacked solid macroeconomic news overnight. Earnings reports from US companies were mixed. Greek crisis overshadowed the market.

ZEW’s April economic climate index for Germany was 53.3, falling short of market expectations. ZEW’s April economic climate index for the euro zone was 64.8. When combined with ongoing Greek crisis, the euro exchange rate fell sharply at one point.

Chinese Premier Li Keqiang hopes to incentivize private investment at the executive meeting of the State Council April 21. Meanwhile, Baoding Tianwei Group defaulted as it failed to pay interest rate for the second Medium Term Note issued in 2011 due to severe losses.

The US dollar index rose 0.07%; the EUR:USD fell 0.03%; US stocks were mixed, while European stocks mostly increased. LME base metals prices diverged.

LME zinc prices are expected to move between USD 2,185-2,215/mt today. SHFE 1506 zinc contract prices will fluctuate between RMB 16,480-16,580/mt, with spot discounts of RMB 120-70/mt against SHFE 1506 zinc contract prices.