SHANGHAI, Aug. 21 (SMM) - LME zinc price volatility is expected to increase next week, moving in a $1,780-1,850 per tonne range, SMM predicts.
"Zinc inventories on the LME grew over 40,000 tonnes this past week, while contango on LME zinc held at $6-5 per tonne, both unfavorable for zinc prices”, said SMM zinc analyst.
But the US dollar was weighed down now that market expectations decreased that the Fed will raise interest rate in September. This will lend some support to zinc prices, SMM added.
SHFE zinc contracts for October delivery will move between 14,600-15,100 yuan per tonne, and spot premiums of #0 zinc will drop below 200 yuan per tonne.
Continuous arriving shipments of imported zinc will add to supply, despite the fact that some smelters chose to conduct maintenance or hold back goods against low prices. Additionally, downstream consumption is still very soft.
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