SMM Zinc Market Morning Review (2015-4-28)

SHANGHAI, Apr. 28 (SMM) – LME zinc prices opened at USD 2,245.5/mt on Monday and extended the rebound to break through USD 2,300/mt, hitting USD 2,314/mt, the highest since November 2014. LME zinc closed up USD 53.5/mt at USD 2,298.5/mt

Trading volumes dropped 1,604 lots and positions declined 957. LME zinc inventories declined 2,650 mt to 478,725 mt.

Eyes will be on European and American economic indicators due out Tuesday night, but China’s monetary policy will be the focus. Optimistic sentiment still overshadows today’s market, posting a narrowing rise in lead prices. Spot lead is expected to remain strong with traders quoting high.

A-share, metals and industrial products rose considerably on easy monetary policy. News come that People’s Bank of China plans to employ unconventional measures to stimulate the economy. Anticipation for China’s Quantitative Easing policy pushed China Yuan down 0.41% in a day, the largest intraday drop since March 2014. China’s above-scale industrial profits fell 2.7%, vs. the same period last year, with the drop narrowing 1.5 percentage points.

Markit’s April service PMI from US was 57.8 and composite PMI 57.4, both lower than those in March. Manufacturing index from the Dallas Fed was -16 in April, lower than expected -12, weighing down US dollar index.

Adjustment of Greece negotiating team indicated that Greece is expected to make progress with creditors, pushing up Greece stocks and bonds, European stocks and euro.

US stocks dropped while European stocks increased. US dollar index dropped 0.2%. The most active US crude oil contract prices fell 0.28%. LME base metals rose and LME gold surged 1.92%.

SHFE 1507 zinc contract started at RMB 16,860/mt during Monday’s night session and stood above RMB 17,000/mt to end with a RMB 295/mt rise at RMB 17,060/mt. Positions in the July delivery zinc soared 11,452 and trading volumes also increased 37,744 lots.

SHFE zinc is expected to trade at RMB 17,000-17,100/mt on April 28, and spot zinc may be offered at discounts of RMB 200-220/mt.