SHANGHAI, Jun. 12 (SMM) – LME zinc prices opened at USD 2,145/mt and fell to USD 2,125/mt, dipping to a two-month low of USD 2,112/mt, and closed at USD 2,127/mt, down USD 19.5/mt or 0.91%. Trading volumes increased 886 to 11,539 lots, and total positions grew 2,068 to over 314,000. LME zinc inventories fell 1,200 to over 449,000 mt.
SHFE 1508 zinc contract prices opened at RMB 16,280/mt Thursday evening, then plummeted to RMB 16,100/mt, but increased to RMB 16,200/mt and closed at RMB 16,205/mt, down RMB 130/mt or 0.8%. Trading volumes increased 22,568 to 69,318 lots, and total positions increased 588 to 124,000.
Most economic indicators from China released yesterday were poor. Fixed asset investment in cities and towns during the first five months this year was up 11.4% YoY, falling short of the 11.9% expected and the 12% growth in the first four months, and slowing for the 11th straight month. But investment growth in May increased as manufacturing investment grew. Value added at China’s large industrials in May was up 6.1% YoY, slightly better than market expectations and April’s. Consumer goods retail sales in May totaled RMB 2.42 trillion, up 0.81% MoM and 10.1% YoY (with growth of 10.2% excluding price factor), in line with market expectations. New RMB loans in May were RMB 900.8 billion. China’s M2 supply increased 10.8% YoY, up from the 10.4% growth expected and the 10.1% increase in April. China’s major economic indicators suggest additional stimulus measures are needed. This caused market concerns to grow and weighed down commodity prices.
US sales and employment figures, however, were upbeat. Seasonally adjusted US retail sales in May rose 1.2% MoM, and climbing for the 3rd consecutive month. The number of initial jobless claims last week remained below 300,000 for the 14 weeks in a row, increasing 2,000 to 279,000, slightly higher than the 279,000 increase expected.
Concerns over Greek crisis were fueled, weighing down the euro and bolstering the US dollar index to rise.
The US dollar index climbed 0.44%. The EUR:USD dropped 0.59%. US stocks increased slightly. European stocks climbed initially then fell. LME base metals prices fell across the board, with LME copper prices down as much as 2%, and LME lead and tin prices down over 3%.
LME zinc prices are expected to fall to USD 2,100-2,130/mt today. SHFE 1508 zinc contract prices will drop to RMB 16,150-16,250/mt, with spot prices ranging from RMB 10/mt below to RMB 10/mt above SHFE 1508 zinc contract prices.