LME Zinc Inventories Surge, Reason behind Rapid Decline in LME Zinc?

SHANGHAI, Nov 3 (SMM) - The most-traded SHFE zinc contract hit its highest since September 2007 on October 18 after consolidating for nearly three months, but subsequently pulled back.

The focus this week includes: The Fed’s FOMC meeting, coal price trends, final value of October Manufacturing PMI in Eurozone, final value of US October Markit Manufacturing PMI, October ISM Manufacturing PMI, October ADP Employment, October unemployment rate; China's October Caixin Manufacturing PMI and October Caixin Service PMI. In terms of events, FOMC will announce the interest rate resolutions this Thursday; the Fed Chairman Powell will hold a press conference; the Bank of England will announce interest rate resolutions, meeting minutes, and monetary policy reports; and European Central Bank President Lagarde and Executive Committee Member Schnabel will deliver speeches.

Spot zinc trading improved in Guangdong today as traders purchased goods actively.

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

One zinc smelter in South China began maintenance cycle due to transformer and device reasons.

Many zinc traders contributed the surge in zinc market mainly to two factors, 21st Century Business Herald reported. 

SHFE 1710 zinc opened at RMB 26,110/mt and closed at RMB 25,930/mt, down RMB 35/mt or 0.13%.

Spot zinc premiums in Shanghai will fall in the near term due to more arriving shipments, SMM predicts.

Some traders will transfer goods from Guangdong to Shanghai for arbitrage, SMM understands.

The SMM/LME zinc price ratio averaged 8.45 this past week, up from 8.37 a week earlier, turning import losses to premiums of 225-584 yuan per tonne.