SHANGHAI, Apr. 28 (SMM) – Last week, the most active SHFE zinc contract shifted from the 1506 to the 1507, and the July delivery contract stalled at RMB 16,500-16,600/mt, surrendering its earlier momentum.
The discount on #0 zinc ingot in the Shanghai spot market dropped from RMB 140-90/mt to RMB 100-70/mt against SHFE 1506 zinc last week. Some zinc smelters refrained from selling, but most sold as usual, leaving spot market supply sufficient. Large traders controlled several common brands, though, creating slightly tight supplies in those products. Spot market trading rose as traders aggressively sought bargains. Downstream producers purchased on need with volumes little changed week on week.
#0 zinc ingot in Tianjin remained at a discount of RMB 10/mt against SMM #0 zinc ingot. Traders and zinc smelters in Tianjin sold actively, keeping spot market supply healthy. Galvanizing plants maintained stable operations. News heard that a new round of environmental protection inspections will be in place again in Tianjin, which will cast a shadow over expectations over demand.
Guangdong’s #0 zinc ingot expanded from RMB 0-10/mt premium to RMB 20-30/mt against SMM #0 zinc ingot. Inventories in Guangdong dropped last week as some zinc smelters conducted maintenance. Spot market zinc supply tightened. Zinc smelters sold only at highs, supporting spot prices. Traders went bargain hunting while downstream producers maintained steady order volumes. Guangdong saw an uptick in trade volume last week.
SHFE 1507 zinc contract prices should test support at RMB 16,500/mt and mainly move between RMB 16,400-16,700/mt.