Zinc Trading Recovers across China Major Markets, SMM Reports

The suspension of economic agenda of Joe Biden drag down US stocks at the beginning of last week and the interest rate hikes in many overseas countries triggered the market worries about the economic downturn. Under this background, the bulls took profit and left the market.

LME zinc fell to $3,283/mt in the first half of last week as the continuous deliveries in Asia led to increasing LME inventory and bearish sentiment pervaded on the announcement of bond-buying tampering by the Fed.

Focuses this week should include: Industrial/Economic Climate Index, CPI monthly rate and the readings of Manufacturing PMI in Eurozone in November, US ADP payrolls and US unemployment rate in November; China official manufacturing PMI, China Caixin Manufacturing PMI in November. In terms of events, the Fed Governor Bowman will deliver a speech on the central bank and the US economy this Tuesday. European Central Bank President Lagarde will participate in a round table meeting in Turin. The Fed will publish a Beige Book on economic conditions this Thursday.

The focus of this week includes the September seasonally adjusted trade account in the Eurozone; the November New York Federal Reserve manufacturing index; the October unemployment claims and unemployment rate in the United Kingdom; the Eurozone’s Q3 GDP annual rate readings and seasonally adjusted quarterly rate of employment; US retail sales monthly rate in October.

On Wednesday, LME zinc will fall at first, and then rise as a falling dollar will support zinc price, which may challenge USD 3,300/mt, with price range between USD 3,260-3,300/mt.

Spot premiums on #0 zinc shrank sharply from 580-750 yuan per tonne early this week to 400-450 yuan per tonne over SHFE October zinc in Tianjin on September 22, SMM reported.

LME zinc is expected to move between USD 3,025-3,070/mt today.

LME zinc contango turned into a backwardation of USD 29.5/mt.

Spot premiums in Tianjin narrowed from 580-750 yuan per tonne last week to 480-600 yuan per tonne September 18, SMM finds.

The price spread on zinc expanded 30 yuan per tonne between Guangdong and Shanghai today, SMM reported.