SHANGHAI, Nov. 6 (SMM) - LME zinc prices will test support from $1,650 and move between $1,620-1,690 per tonne next week, SMM foresees.
Market sentiment will improve now that China is ramping up financial spending and policy support, especially in domestic property, automobile and infrastructure construction industries. The Shanghai Composite Index has stood at 3,500, also inspiring the market.
Nevertheless, the US dollar is expected to climb, weighing on base metals. “A string of major economic indicators from US, including University of Michigan’s November CCI, October retail sales and PPI, slated for release next week, are promising, bolstering the US dollar.” said an SMM zinc analyst.
SHFE zinc for January delivery will have little downside room, and hover at 13,200-13,700 yuan per tonne, the zinc analyst added. Spot # zinc in China will trade 180-350 yuan above January delivery zinc on the SHFE.
Zinc smelters will continue to hold onto their goods given low zinc prices, reducing spot supplies. Traders should hold prices firm, and downstream buyers will purchase cheaper resources modestly. Trading will be sluggish on soft demand from galvanizers in North China.
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