SHANGHAI, Dec. 18 (SMM) - LME zinc prices should look for price floor next week and fluctuate between USD 1,450-1,530/mt due to strong US dollar index.
“The US dollar index gained ground after the US Federal Reserve announced it would raise interest rate by 0.25%, and will weigh down base metals prices next week,” said an SMM zinc analyst.
Major economic indicators from the US scheduled for release in the first half of next week, including Q3 GDP data, November PCE and durable goods orders, are expected to be mixed. Some investors should retreat from the market due to the Christmas holiday, so trade will be quiet in the latter half of the week.
February delivery zinc on the SHFE will be resistant to declines due to yuan’s devaluation, trading between 12,200-12,700 yuan per tonne, the analyst added.
In China’s spot markets, supplies will be sufficient due to zinc smelters selling actively, goods releases from hedge traders and inflows of imported zinc. However, demand will soften because of year-end liquidity crunch. Spot zinc will trade 0-100 yuan per tonne below February delivery zinc on the SHFE.
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