[Zn Price] SMM Zinc Market Morning Review (2015-7-27)

SHANGHAI, Jul. 27 (SMM) – Major economic news released last Friday overshadowed the market. China’s manufacturing PMI in July hit a 15-month low, according to Caixin.com, depressing market sentiment and growing concerns over China’s demand. Eurozone PMI also fell short of market expectations, fueling market anticipation that the euro will weaken further. It was reported the Fed will raise interest rate by 25 basis points before the year’s end, bolstering the US dollar index.

LME zinc prices opened at USD 1,980.5/mt, then fell to USD 1,950/mt, and dipped to a four-week low of USD 1,947/mt, and closed at USD 1,958/mt, down USD 21/mt or 1.06%. Trading volumes increased 4,188 to 13,556 lots, and total positions grew 4,542 to 300,000. LME zinc inventories were down 2,175 to 445,500 mt.

SHFE 1509 zinc contract prices opened at RMB 15,000/mt last Friday evening, then fell to a four-week low of RMB 14,840/mt, but clawed back some losses at the end of trading, and closed at RMB 14,940/mt, down RMB 45/mt or 0.3%. Trading volumes decreased 764 to 48,812 lots, and total positions grew 2,514 to 105,856.

Profit at China’s large industrials in the first half of the year and US durable goods orders slated for release today are optimistic. But investor concerns over China’s demand persist. When combined with short momentum prevailing in the gold market, LME zinc prices should move between USD 1,955-1,985/mt today, and SHFE 1509 zinc contract prices will fluctuate between RMB 14,900-15,000/mt, with spot premiums of RMB 70-120/mt against SHFE 1509 zinc contract prices.