13% Chinese Investors Bullish toward Zinc, SMM Survey

SHANGHAI, Mar. 15 (SMM) – SMM survey of 30 industry insiders finds that about 13% are bullish toward zinc price trends this week, expecting LME zinc to rise to USD 1,860/mt, and SHFE 1605 zinc to climb to RMB 14,500/mt. Value-added at China’s large industrials and retail sales of consumer goods were downbeat in February, but fixed asset investment in cities and towns topped market expectations. Additional stimulus measures are also expected. Most market players expect the US Federal Reserve will unlikely raise interest rate in March, constraining the US dollar index. The euro climbed as European Central Bank president said the bank will not cut interest rate further in the foreseeable future, weighing on the US dollar index. Crude oil is still firm, and downstream demand is expected to improve, inspiring market sentiment.

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

Some 37% are bearish, seeing LME zinc fall to below the 20-day moving average and SHFE 1605 zinc drop to RMB 13,500-13,800/mt. Value-added at China’s large industrials and retail sales of consumer goods in February were both downbeat. Meanwhile, iron ore and rebar fell recently, depressing market sentiment. On the market fundamental side, total inventories in Guangdong, Shanghai and Tianjin climbed to 450,000 mt, up 30% compared with the same period of 2015. When combined with inflows of imported zinc and slowing consumption, zinc prices should take a hit.

The remaining 50% are neutral, expecting LME zinc to fluctuate between USD 1,750-1,830/mt and SHFE 1605 zinc to fluctuate between RMB 13,800-14,300/mt. The market will remain cautious, awaiting release of additional economic indicators. Technical indicators also mean that zinc prices will remain range-bound.