SMM Zinc Weekly Price Review and Forecast (May 11-15, 2015)

SHANGHAI, May 11 (SMM) – Spot discounts on #0 zinc in Shanghai against SHFE 1507 zinc contract prices narrowed from RMB 160-130/mt to RMB 140-110/mt last week. Smelters sold actively as spot zinc prices rose above RMB 17,000/mt. Traders, however, held onto their goods due to the lack of arbitrage opportunity and expectations of narrower spot discounts on decreased inflows of imported zinc. Some traders purchased lower-priced goods as the delivery date neared. Downstream buyers, confronting with cash tightness, purchased as needed, leaving overall transactions muted.

In China’s spot market, smelters will move goods enthusiastically at high prices this week, leading to ample supply. But downstream buyers will purchase as needed on high costs, keeping trading quiet. Spot zinc prices will be close to SHFE spot-month zinc contract prices as the delivery date nears, and RMB 100/mt below SHFE 1507 zinc contract prices.