SHANGHAI, Aug. 19 (SMM) -
SHANGHAI, Aug. 19 (SMM) - China’s zinc prices are expected to fall in the near term with large arriving shipments of imported zinc, SMM foresees.
Large shipments of imported zinc arrived recently as the high SMM/LME zinc price ratio has left zinc imports profitable over the last two weeks.
"Import profit widened to 600 yuan per tonne at one point, incentivizing speculative traders to place orders, most of which are SMC, YP, AZC and VM #0 zinc”, SMM says.
Consequently, spot premiums of #0 zinc against October delivery SHFE zinc contracts narrowed from 300 yuan to 200 yuan per tonne. The price spread between domestic and imported zinc also widened from 30-50 yuan to 100 yuan per tonne. Since additional shipments of imported zinc are expected to arrive soon, zinc prices will fall further.
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