87% Chinese Investors Neutral toward Zinc, SMM Survey

SHANGHAI, Mar. 1 (SMM) – SMM survey of 30 industry insiders finds that about 87% are neutral, expecting LME zinc to hover between USD 1,720-1,790/mt and SHFE 1604 zinc to fluctuate between RMB 13,800-14,300/mt. 2016 term TCs between overseas mines and smelters are expected to be settled at USD 190/mt, with benchmark price still under negotiation. Some industry insiders are bullish on tightening ore supplies. Zinc concentrate supplies are expected to fall 1 million mt in 2016. Macquarie estimates zinc concentrate will fall 5.2% YoY to 12.59 million mt. Goldman Sachs sees zinc lead increases. But sluggish economy in China will constrain zinc price gains. Some institutions see no turnaround in zinc consumption this year.

See SMM price forecast please click: LME Zinc to Remain Range-Bound This Week

Some 13% are bearish, expecting LME zinc to fall below USD 1,700/mt, and SHFE 1604 zinc to drop to RMB 13,700/mt. US revised Q4 GDP rose 1%. Household income, consumption and core PCE in January were all upbeat, driving up the US dollar index to breach 98. US non-farm employment numbers China’s official and Caixin manufacturing PMIs in February scheduled for release this week are not promising due to the 2016 Chinese New Year holiday early in the month. Total inventories in the three regions of China climbed to above 430,000 mt after the 2016 Chinese New Year holiday. This, combined with soft consumption, depresses market confidence.