SHANGHAI, May 11 (SMM) – China’s trade data released last Friday were sluggish. US non-farm unemployment rate hit a 7-year low, boosting the US dollar index and weighing on base metals prices. LME zinc prices opened at USD 2,368.5/mt, and surged to USD 2,390/mt, then dropped back to close at USD 2,351/mt, down USD 18/mt or 0.76%. Trading volumes decreased 2,535 to 9,587 lots, and total positions grew 7,943 to 325,118.

SHFE 1507 zinc contract prices opened at RMB 17,120/mt last Friday evening, then touched RMB 17,190/mt, then fell back below the 10-day moving average and closed at RMB 17,040/mt, down RMB 100/mt or 0.58%. Trading volumes increased 14,350 to 76,636 lots, and total positions declined 1,104 to 153,454.

The PBOC decided to lower deposit/lending interest rate for a second time this year by 0.25 percentage points to 2.25% and 5.1%, respectively, for financial institutions. Many institutions believe this should allow more capital to flow into real enterprises and China’s domestic stocks markets.

China signed a contract with Russia to provide billions of USD loans for infrastructure construction in Russia. Russia will also build a natural gas pipeline to China which will sell 30 billion m³/yr natural gas to China.

223,000 jobs were added in US non-farm sector in April, falling far short of the 228,000 expected. But non-farm unemployment rate dropped to a 7-year low of 5.4%. The US dollar index fell initially then climbed to 94.77.

Gold prices were not affected significantly after UK general election. European and US stocks rose across the board. LME base metals prices were mixed.

LME zinc prices are expected to move between USD 2,330-2,360/mt today. SHFE 1507 zinc contract prices will fluctuate between RMB 16,960-17,060/mt, with spot discounts of RMB 130-100/mt against SHFE 1507 zinc contract prices.