SHANGHAI, May 4 (SMM) – SMM survey of 30 industry insiders finds that about 23% are bullish toward zinc price trends this week, expecting LME zinc to stabilize at USD 1,950/mt and point toward USD 2,000/mt, and SHFE 1607 zinc to reach RMB 15,800/mt. TCs of imported zinc concentrate continued falling as inflows of imported zinc decreased with the closing of import window. Domestic zinc smelters thus increased purchases for domestic ore, tightening domestic ore supply. TCs of domestic zinc concentrate were lowered in some regions, with mainstream of RMB 5,100-5,300/mt (zinc content), or as low as RMB 5,000/mt (zinc content). This, combined with falling inventories in China’s major markets, should bolster zinc prices.
See SMM Price Forecast Please Click: LME Zinc to Move at Highs Next Week
About 60% are neutral, expecting LME zinc to fluctuate between USD 1,900-1,950/mt and SHFE 1607 zinc to fluctuate between RMB 15,000-15,500/mt. Worse-than-expected economic indicators from the US, combined with strengthening JPY, weighed down the US dollar, and in turn boosting base metals. Positions on LME zinc and SHFE zinc decreased over 10,000 and 80,000, respectively, over the past week, meaning strong market reticence.
Some 17% are bearish, seeing LME zinc fall to USD 1,850/mt. SHFE 1606 zinc is expected to slide below RMB 14,800/mt. China’s official and Caixin manufacturing PMIs in April both fell short of market expectations, with new orders slow. The Shanghai Composite Index met pressure from 3,000, negatively affecting market sentiment. Falling ferrous metals prices also weigh on base metals. Total inventories in the three regions fell to 370,000 mt, but are still higher than 290,000 mt in the same period of last year. Besides, spot discounts only narrowed to RMB 40/mt when SHFE zinc rose from RMB 14,300/mt to RMB 15,300/mt.