SHANGHAI, Jul. 16 (SMM) – LME zinc prices dropped with the drag from the US dollar index, but outperformed other base metals. China’s Q2 growth unexpectedly topped market expectations, recording 7%, helping ease investor concerns over China’s demand.
LME zinc prices opened at USD 2,060/mt Wednesday, then surged to hit a one-month high of USD 2,117.5/mt. But Fed chairwoman Janet Yellen stated they will hike interest rate later this year on positive US economic indicators, boosting the US dollar index and weighing down base metals. LME zinc prices rolled back some early gains and closed at RMB 2,080.5/mt, up RMB 19.5/mt or 0.95%. Trading volumes increased 5,622 to 15,122 lots, and total positions fell 4,474 to over 296,000. LME zinc inventories fell 925 to 456,350 mt.
SHFE 1509 zinc contract prices opened at RMB 15,780/mt Wednesday evening, then edged down to RMB 15,700/mt, and closed at RMB 15,665/mt, up RMB 80/mt or 0.51%. Trading volumes increased 28,944 to 99,752 lots, and total positions fell 4,618 to 120,000.
Investors will keep a close watch on eurozone June CPI and statement of European Central Bank president. A weakening euro will bolster the US dollar index, which will weigh on base metals prices. LME zinc prices should move between USD 2,060-2,090/mt today, and SHFE 1509 zinc contract prices will fluctuate between RMB 15,580-15,680/mt, with spot price ranging between RMB 10/mt below to RMB 10/mt above SHFE 1509 zinc contract prices.