Fund Managers to Unload Net Long of LME Zinc Slightly

On the one hand, Teck Resources has signed an annual zinc concentrate contract with a 45% increase in TCs to $230/dmt. An escalation clause was included: if the prices of zinc exceed $3,800/mt, TCs will rise by $0.05/mt for every $1/mt increase in the prices of LME zinc, but if the zinc prices fall, TCs will remain unchanged (the same as the 20%/80% price sharing scheme in China).

Total zinc ingots inventories across seven major markets in China stood at 278,000 mt as of April 8, up 5,200 mt from April 1, down 300 mt from March 6. Domestic inventories increased.

The moves of SHFE and LME have been heading toward different directions recently. As of December 8, LME lead has been falling for five consecutive sessions. SHFE lead, on the other hand, rallied strongly after falling for two days in a row, and rose 1.88% to 15,175 yuan/mt to close the day.

Market focus this week includes the readings of the manufacturing PMI in the Eurozone in November and the Markit manufacturing PMI in the United States in November; the one-year loan market interest rate as of November 22 in China. On the events front, the Federal Reserve FOMC will release the minutes of the monetary policy meeting this Thursday; Bank of England Governor Bailey will deliver a speech this Friday.

Nickel stocks across LME-approved warehouses gained 2,874 mt on Monday to 69,180 mt

Traders continued to lower offers in China’s spot zinc market on Thursday May 10 as supply of imported zinc increased, SMM learned.

In China's spot zinc market on Wednesday May 9, smelters continued to lower offers after thinner transactions from the previous day

SHFE zinc tumbled during the day and touched a low at 23,605 yuan/mt on Thursday April 12 despite better fundamentals since the start of this month.

SMM Evening Comments

SMM Evening Comments