SHANGHAI, May 5 (SMM) – SHFE 1507 zinc contract followed LME zinc up to RMB 17,150/mt and then pulled back slightly. Buying activities increased marginally.
The discount on #0 zinc ingot in the Shanghai spot market expanded to RMB 120-100/mt against SHFE 1506 zinc last week. Zinc smelters increased supply on rallying prices, but traders refrained from selling as their goods were tied up in futures market. Downstream buyers rarely entered the market after zinc prices neared RMB 17,000/mt, so purchases did not improve before the May Day holiday.
Spot discounts of #0 zinc ingot in Tianjin widened from RMB 10/mt to RMB 20-30/mt against SMM #0 zinc ingot price. Premiums on #0 zinc ingot in Guangdong narrowed from RMB 20-30/mt to RMB 0/mt against SMM #0 zinc ingot.
SHFE 1507 zinc contract prices are unlikely to rise sharply without any major positive reports, only hovering near RMB 17,000/mt.