SHANGHAI, Aug. 10 (SMM) – The number of US non-farm employment released last Friday fell short of market expectations, but the growth stayed above 200,000. Market expectations grew that the Fed will raise interest rate in September, keeping the US dollar index high, weighing down commodity. When combined with the retreat of hedge fund, the market lacked confidence toward the market. Crude oil prices extended losses.

LME zinc prices opened at USD 1,871/mt, and fell to USD 1,850-1,860/mt, dipping to a two-year low of USD 1,846/mt. But LME zinc prices rebounded to USD 1,879.5/mt later on due to short covering, and closed at USD 1,857.5/mt. Trading volumes increased 3,171 to 12,512 lots, and total positions grew 2,114 to 311,993. LME zinc inventories fell 1,325 to 428,325 mt.

SHFE 1510 zinc contract prices opened at RMB 14,310/mt last Friday evening, then dipped to RMB 14,270/mt but rebounded to RMB 14,520/mt later, and closed at RMB 14,450/mt, up RMB 25/mt or 0.17%. Trading volumes of SHFE 1510 zinc contracts decreased 25,000 to 88,660 lots, and total positions grew 4,466 to 177,870. Total trading volumes were over 128,000 lots, and total positions were up 4,708 to 356,790.

China’s July PPI hit a new low since October 2009, and exports declined appreciably, reflecting a deflationary pressure. LME zinc prices should move between USD 1,840-1,870/mt today, and SHEF 1510 zinc contract prices will hover between RMB 14,350-14,450/mt, with spot premiums of RMB 390-440/mt.