Some 47% Chinese Investors Bullish toward Zinc, SMM Survey

SHANGHAI, Jul. 12 (SMM) –LME zinc stabilized around USD 2,100/mt last week. SMM survey of 30 industry insiders finds that about 47% 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. Global central banks are expected to maintain easy monetary measures. The Bank of England said it will release EUR 150 billion in liquidity. This will attract inflows of capital into commodity market for safe-haven. On the fundamental front, domestic zinc concentrate TCs fell RMB 200/mt in July on the month, with mainstream below RMB 5,000/mt at present, reflecting tightening ore supply. Speculative traders expect zinc concentrate inventories to fall further, forcing smelters to slash output. Technical factor also points out further gains in zinc.

See SMM Price Forecast Please Click: Zinc Futures on LME and SHFE to Slide Next Week, SMM Says

46% 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. investors will remain cautious before the release of China’s Q2 GDP. China is expected to step up easy measures, but concerns over economy will dampen market sentiment. Crisis in Italy’s banking sector and arbitration on the South China Sea grew risks.

Some 7% are bearish, seeing LME zinc fall to USD 2,080/mt. SHFE 1609 zinc is expected to drop to RMB 16,000/mt. Output cut will be limited due to continuously rising zinc prices and higher profit at mines and smelters. Besides, off-demand season in July slowed sales. Selloff demand will weigh on zinc. Goods will be released after delivery, adding to supplies. Zinc stocks in the three regions hovered around 330,000 mt recently, weighing on zinc.