SMM Zinc Market Morning Review (2015-5-8)

SHANGHAI, May 8 (SMM) – The US dollar index was lifted overnight due to upbeat economic indicators from the US. Crude oil prices pulled down as Yemen ceased fire, weighing on commodity prices. LME zinc prices opened at USD 2,361/mt, and dipped to USD 2,336.5/mt during Asian trading hours, then climbed to USD 2,370/mt, and closed at USD 2,369/mt, up USD 10.5/mt or 0.45%.

SHFE 1507 zinc contract prices fluctuated between RMB 17,155-17,215/mt Thursday evening, and closed at RMB 17,200/mt, down RMB 55/mt or 0.32%. Trading volumes decreased 31,024 to 62,286 lots, and total positions declined 1,680 to 168,462.

The number of US initial jobless claims for the week ending May 2 increased 3,000 to 265,000, its lowest over the last 15 years, and higher than the 277,000 expected. Consumer loans in March grew USD 20.52 billion, compared to the USD 15.8 billion increase expected. A Fed official believes the Fed may raise interest rate soon, and US Q2 growth may rebound to 3%. The US dollar index edged up to 94.64.

Economic indicators from Germany and France were positive. UK’s economic data releases were delayed due to the general election, but which are still promising. Government bond prices slipped across Asia. Japan’s government bond yields hit a two-month high of 0.42% Thursday. Government bond yields in South Korea rose to 2.54% to hit a three-month high. India’s government bond yields surged to 8%, their highest since last December.

A unit of oil field services firm Schlumberger is planning to pay about $232.7 million in U.S. penalties as part of a guilty plea for illegally conducting business with the sanctioned Iran and Sudan, the Justice Department said Wednesday. Iran Petroleum minister said the country’s petroleum output may rise to 4 million bbl/day within eight months after the cancel of the sanction, pushing down COMEX crude oil prices to fall 3.3%.

Precious metals prices fell slightly. LME base metals prices diverged. The Shanghai Composite Index plunged 400 recently.

LME zinc prices are expected to move between USD 2,345-2,375/mt today. SHFE 1507 zinc contract prices will fluctuate between RMB 17,150-17,250/mt, with spot discounts of RMB 150-120/mt against SHFE 1507 zinc contract prices.