SHFE Zinc Prices to Stay Range-Bound (2017-3-10)

[SMM zinc morning comment] Overnight, the most-traded SHFE zinc 2611 contract opened at 26,505 yuan/mt. In early trading, SHFE zinc quickly dipped to 26,415 yuan/mt, then bulls added positions, pushing SHFE zinc up to a high of 26,660 yuan/mt. Subsequently, some bulls took profits and exited, causing SHFE zinc to pull back quickly below the daily average line. It closed down at 26,490 yuan/mt, down 10 yuan/mt, or 0.04%. Trading volume decreased to 59,620 lots, and open interest fell by 2,097 lots to 141,000 lots.

[SMM Morning Meeting Summary: US Dollar Index Firm, LME Zinc Posts a Bearish Candlestick with No Upper Wick] Overnight, LME zinc opened at $3,897/mt, hitting a high of $3,897/mt right at the open. The price center then moved lower, dipping to $3,821/mt during the session. LME zinc subsequently consolidated and rebounded slightly, but pulled back again near the end of trading, ultimately closing down at $3,851/mt, a decrease of $42.5/mt or 1.09%. Trading volume increased to 15,753 lots, while open interest fell by 389 lots to 263,700 lots......

Nyrstar has launched a strategic review of its Budel zinc smelter in the Netherlands, citing elevated European energy costs, intense competition for zinc concentrate and historically low treatment charges. The company said Budel has been losing money, while the Dutch government’s decision not to include grid-cost relief for energy-intensive industries in its 2027 budget has added further pressure. The review is expected to conclude by the end of 2026, with operations continuing as normal during the process. Budel has an annual refined zinc capacity of 315,000 tonnes. The smelter was placed on care and maintenance in January 2024 due to high energy costs before restarting in May that year. The review outcome could become an important variable for European refined zinc supply.