[Zn Price] SMM Zinc Market Morning Review (2015-7-24)

SHANGHAI, Jul. 24 (SMM) – Short momentum predominated in the market with the lack of positive news.

LME zinc prices opened at USD 2,000/mt, then fluctuated between USD 2,000-2,015/mt during Asian trading session. US economic indicators released overnight topped market expectations. The number of initial jobless claims dropped to its lowest in 40 years. When combined with upbeat economic indicators released previously, market expectations of nearing interest rate hike by the Fed grew. Gold and crude oil prices continued to fall, dragging down LME zinc price to USD 1,980/mt, which closed at RMB 1,979/mt, down RMB 18/mt or 0.05%. Trading volumes increased 88 to 9,368 lots, and total positions grew 3,012 to 298,847.

SHFE 1509 zinc contract prices opened at RMB 15,210/mt, then fell to RMB 15,050-15,100/mt Thursday evening, and closed at RMB 15,065/mt, down RMB 115/mt or 0.76%. Trading volumes decreased 2,210 to 49,576 lots, and total positions grew 2,202 to 106,104.

LME zinc prices should move between USD 1,965-1,985/mt today, and SHFE 1509 zinc contract prices will fluctuate between RMB 15,000-15,100/mt, with spot premiums of RMB 30-80/mt against SHFE 1509 zinc contract prices. HSBC’s PMI for China will be released today, which is expected to be below 50. When combined with low operating rates at SMEs, base metals prices should extend losses.