SHANGHAI, Jul. 5 (SMM) –LME zinc rose over 6% last week, rising to USD 2,150/mt. SMM survey of 30 industry insiders finds that about 50% are bullish toward zinc price trends this week, expecting LME zinc to advance to USD 2,200/mt, and SHFE 1609 zinc to climb to RMB 17,000/mt. Additional easy monetary measures are expected to be pushed by central banks after UK voted to leave the EU. Bank of England president hinted they may lower interest rate this summer. European Central Bank was forced to lower bond purchase standard. Offshore yuan fell to 7 at one point last week. Caixin’s June manufacturing PMI for China slid for the third straight month. When combined with growing external risk, investors expect China to step up easy monetary measures. Domestic zinc concentrate TCs continued to fall, with mainstream of RMB 4,800-5,100/mt at present, reflecting tightening ore supply.
See SMM Price Forecast Please Click:LME Zinc to Maintain upward Momentum Next Week, SMM Foresees
Some 33% are bearish, seeing LME zinc fall to USD 2,100/mt. SHFE 1609 zinc is expected to drop to RMB 16,000/mt. Downstream demand weakened as the slack season set in. Zinc inventories in the three regions stopped falling and hovered around 330,000 mt. Smelters and cargo holders sold actively at highs. Spot discounts of #0 zinc in Shanghai expanded to RMB 60-40/mt against SHFE 1608 zinc. Most cargo holders are bearish toward spot copper and witnessed slow sales. As supplies increase after restart at zinc smelters, zinc prices should be weighed down.
17% are neutral, expecting LME zinc to fluctuate between USD 2,100-2,170/mt and SHFE 1609 zinc to fluctuate between RMB 16,200-16,900/mt. The Fed and European Central Bank will announce their policy meeting minutes for June, leaving investors cautious.
Shorts will also remain reticent at highs, so any downward room for zinc will be limited. Zinc price should hover at highs in the near term.