SHANGHAI, Nov. 24 (SMM) - SMM surveyed over 30 market players to find that 54% are neutral toward zinc prices this week, expecting LME zinc to hover between USD 1,500-1,560/mt, and SHFE 1601 zinc to fluctuate between RMB 12,000-12,600/mt. LME zinc prices surged after Chinese zinc smelters announced output cut plans, but then rolled back early gains. Commodity prices fell by and large, and the BDI continued to hit record lows. In this context, zinc prices will receive little boost from output cut. Trading volumes on SHFE zinc increased to over 2 million lots.

See SMM Forecast Please Click:LME Zinc to Rally Next Week, SMM Says

43% are bearish, expecting LME zinc to fall to USD 1,450/mt, and SHFE 1601 zinc to dip to RMB 11,800/mt. Market speculation of additional quantitative easing by European Central Bank will depress the euro, while the US dollar breached 100 on Monday to hit an eight-month high, following upbeat economic indicators from the US. LME copper dropped below USD 4,500/mt, and SHFE nickel prices fell by daily limit.

3% are bullish, expecting LME zinc to rebound to USD 1,600/mt, and SHFE 1601 zinc to rise to RMB 13,000/mt. Smelters will continue to hold back goods on falling zinc prices, and mines are also unwilling to produce. Some mines in Inner Mongolia suspended production, tightening ore supplies in North China and bolstering zinc prices.

Major zinc smelters in China announced last Friday that they plan to cut output by 500,000 mt in 2016, and will not sell spot zinc below RMB 13,500/mt. Spot supply tightness will shore up zinc prices.