SHANGHAI, Dec. 23 (SMM) - #0 zinc prices in Shanghai traded 80-16 yuan per tonne above SHFE February zinc December 22, with the premiums expanding 60-70 yuan per tonne from a day earlier. Spot premiums rose to around 100 yuan per tonne in the morning session. Meanwhile, the price spread between Shanghai and Tianjin widened to 215 yuan per tonne, SMM reported.

Spot supply tightness pushed up spot premiums in Shanghai, SMM said.

Market inventories are low, and maintenance at zinc smelters also tightened supply. Zinc inventories in Shanghai, Guangdong and Tianjin fell from 450,000 tonnes early this year to 220,000 tonnes, SMM statistics show. Inventories in Shanghai were 95,000 tonnes, the lowest from September 2008.

The average operating rate at domestic zinc smelters will slide 4.7 percentage points on the month to 75.6% in December, SMM reckons. Output at Hanzhong Zinc Industry slid in December. Arriving shipments from smelters decreased recently because of maintenance at them.

Inflows of imported zinc increased in Shanghai recently, but were still limited since import window remains closed, SMM said.

On the demand front, downstream buyers purchased modestly at lows. Zinc prices fell rapidly this week. SMM #0 zinc prices averaged 21,475 yuan per tonne as of Thursday, down 1,165 yuan per tonne on a weekly basis. This drove some bargain hunters into the market.

Some traders also sourced goods for term contract delivery at the year’s end, SMM added. 

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