SHANGHAI, Aug. 14 (SMM) – On Monday, #0 zinc spot price in Shanghai market was quoted at premiums of 120-150 yuan per tonne over SHFE 1709 zinc, a big contrast with discounts of 20 yuan on last Friday’s morning business. Why?
SMM attributes this to following three factors.
First, inflows of zinc at warehouses in Shanghai reduced last week, and meanwhile, arrivals of imported goods were also down from the level seen in past weeks. Shanghai zinc inventories fell 8,100 tonnes to 65,800 tonnes, giving a boost to spot premiums.
Second, major traders held back sales due to low inventories, and spot supply tightened as a result. Downstream demand, on the other hand, remained stable, also sending up spot premiums.
Third, the price gap between SHFE 1708 and 1709 zinc expanded from 20 yuan seen last week to around 100 yuan, and tomorrow will be the delivery date of SHFE 1708 zinc, growing market expectations over tighter supply, another supportive factor behind higher premiums.
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