Only 7% Chinese Investors Bearish toward Zinc, SMM Surveys

SHANGHAI, Jan. 26 (SMM) – SMM survey of over 30 industry insiders finds that 93% are neutral, expecting LME zinc to hover between USD 1,480-1,540/mt and SHFE 1603 to fluctuate between RMB 12,500-13,000/mt. European Central Bank is expected to leave its interest rate unchanged at its January policy meeting to be held this week. Market uncertainty grew whether the Fed will raise interest rate in March. Chinese key zinc smelters met last Friday to discuss detailed plan for the 500,000 mt of zinc output cut, but did not inspire longs.

See SMM Price Forecast Please Click:LME Zinc to See Uptick Next Week

Only 7% are bearish, seeing LME zinc fall to USD 1,450/mt, and SHFE 1603 zinc drop below RMB 12,500/mt, dipping to RMB 12,300/mt. The SHFE/LME copper price ratio is expected to fall as the People’s Bank of China will stabilize yuan’s exchange rate. Profit at China’s large industrials is not promising in December. When combined with tight liquidity, market bearishness predominates in the market. In China’s spot markets, pre-holiday stock-building has been completed. Combined zinc inventories in Shanghai, Tianjin and Guangdong are now 320,000 mt, and are expected to grow further before the Chinese New Year holiday, weighing on zinc prices.